FelCor Disposes Non-Core Assets - Analyst Blog
05 Junho 2012 - 3:17PM
Zacks
FelCor Lodging Trust Inc. (FCH), a real estate
investment trust (REIT) that owns upper-upscale hotels, has
recently completed the divesture of 6 non-core assets to an unnamed
buyer for $103.0 million, representing a cap rate of 6.8% based on
2011 net operating income.
Comprising 1,527 rooms in aggregate, the divested portfolio
includes the Holiday Inn San Antonio-Airport, the Sheraton Suites
Ft. Lauderdale-Cypress Creek, Doubletree Guest Suites hotels in
Raleigh/Durham and Tampa-Rocky Point, and the Embassy Suites hotels
in Boca Raton and St. Paul.
The asset sale is part of the long-term strategy of the company
to reposition its portfolio to focus on a diversified asset-base of
high-quality hotels in major markets and resort locations that have
steep barriers to entry and solid demand to drive healthy return on
investments.
At present, FelCor has 39 non-strategic hotels in its portfolio,
out of which 16 are currently being offered for sale (including the
just-concluded sale of 6 hotels).
The company utilized the proceeds from the divesture to repay
about $73 million of secured debt. The remainder of the sale
proceeds is expected to be used to pay a portion of its accrued
preferred dividends as well as its regular quarterly preferred
dividends on July 31, 2012. Going forward, FelCor expects to fund
the remaining accrued dividends in 2012 through proceeds from
future asset sale.
FelCor presently owns 70 hotels and resorts in 22 states in the
U.S. and Canada under globally-recognized brands such as – Embassy
Suites Hotels, Doubletree, Hilton, Marriott, Renaissance, Fairmont,
Sheraton, Westin and Holiday Inn.
We currently have a Neutral recommendation on FelCor, which has
a Zacks #3 Rank that translates into a short-term Hold
recommendation. We also have a Neutral recommendation and a Zacks
#2 Rank (short-term Buy rating) for Host Hotels &
Resorts Inc. (HST), one of the competitors of FelCor.
FELCOR LODGING (FCH): Free Stock Analysis Report
HOST HOTEL&RSRT (HST): Free Stock Analysis Report
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Zacks Investment Research
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