"This term loan facility will allow us to fulfill ouracquisition objectives in the near future, while giving usflexibility for growth going forward," says Highland executive vicepresident and CFO Douglas W. Vicari.

Additionally, in its Third Quarter 2004 Earnings Report issuedin late October, officials of the hotel REIT explained that thefacility "will provide additional capacity and flexibility for thecompany to meet its stated investment objectives, while maintainingits targeted leverage objectives of approximately 50%debt-to-capitalization."

Highland's recent acquisition activity includes the signing of adefinitive agreement during the fourth quarter to purchase the197-room Sheraton Barceló Annapolis Hotel in Annapolis, MD fromGrubarges Annapolis LLC for $18 million. The company is planning torenovate the property, which boasts the largest meeting facility inAnnapolis. Acquisition activity during the third quarter included adefinitive agreement to buy Denver's 202-room Marriott Courtyard atDenver International Airport for $17.3 million, Omaha, NE's299-room Omaha Marriott for $28.5 million and the 283-room RadissonHotel Mount Laurel in Mount Laurel, NJ for just under $14.3million.