American General Hospitality Corporation Completes Acquisition of 18 Hotels Valued at Approximately $400 Million

Strategic Insights -

American General Hospitality Corporation, a hotel real estate investment trust, has completed the acquisition of 18 hotels, including a 13-hotel portfolio from trusts managed by Financial Security Assurance, a 4-hotel portfolio in the robust BWI market, and the Holiday Inn O'Hare International Hotel. The three transactions were valued at approximately $400 million. The company expects that all the hotels will be affiliated with premium full-service brands, including Hilton, Courtyard by Marriott, Radisson, and Holiday Inn.

Key Takeaways:

  • The 13-hotel FSA portfolio, acquired on February 13, 1998, includes 3,081 guestrooms primarily located in Florida, California, and New York.
  • Four of the hotels are irreplaceable Florida beachfront locations, one is a destination hotel on Disney property, two are in substantial business locations, and two are uniquely positioned in West Los Angeles.
  • The company expects to sell five of the FSA properties, which do not fit American General Hospitality's strategic investment profile, and will sell them as a group or individually.
  • The 815-guestroom portfolio acquired in the robust BWI market consists of four hotels located in Alexandria, Va., Annapolis, Md., and Hanover, Md.
  • The Holiday Inn O'Hare International Hotel, acquired on February 3, 1998, is a 507-room hotel and convention facility in Rosemont, Ill., adjacent to O'Hare International Airport.
  • American General Hospitality closed its new unsecured $600 million credit facility on February 13, 1998, which will be used to fund the company's hotel acquisition and renovation programs.
  • The company expects to renovate the guestrooms and public areas of the Holiday Inn O'Hare International Hotel and add 242 guestrooms, upgrading it to either a Holiday Inn Select or Crowne Plaza Hotel.
  • The unsecured nature of the credit facility provides American General Hospitality with great balance sheet flexibility, allowing it to close transactions without the cost or delay of recording mortgages and related expenses.

Statistics:

  • The three transactions were valued at approximately $400 million.
  • The 13-hotel FSA portfolio includes 3,081 guestrooms.
  • The four hotels in the BWI market portfolio have a total of 815 guestrooms.
  • The Holiday Inn O'Hare International Hotel has 507 guestrooms.
  • American General Hospitality's portfolio currently includes 66 hotels with 15,159 guestrooms.
  • The company closed its new unsecured $600 million credit facility on February 13, 1998.

Sources:

  • "American General Hospitality Corporation Completes Acquisition of 18 Hotels Valued at Approximately $400 Million," PR Newswire, February 16, 1998.
  • American General Hospitality Corporation, press release, February 16, 1998.