Candlewood Announces Closing of First Phase of Second Sale-Leaseback Agreement With Hospitality Properties Trust.WICHITA, Kan.--(BUSINESS WIRE)--May 27, 1998--Candlewood Hotel Company, Inc. (Nasdaq NM: CNDL) today announced that it has completed the initial closing of its second sale-leaseback agreement with Hospitality Properties Trust (NYSE NYSE See: New York Stock Exchange : HPT HPT Human Performance Technology HPT Hyperparathyroidism HPT Heartland Poker Tour HPT Home Pregnancy Test HPT High Pressure Turbine HPT Host Print Transform HPT High-Performance Team HPT high-payoff target (US DoD) ). The $29.9 million closing represents the sale of four Candlewood can·dle·wood n. 1. Any of several trees or shrubs yielding a usually resinous wood. 2. The wood of such a plant, burned for light or fuel. 3. The ocotillo. Noun 1. properties with a total of 478 suites, located in the following cities: Houston, TX; Jacksonville, FL; Huntsville, AL; and Tempe, AZ. All four hotels are open and in full operation. A newly formed, wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Candlewood will lease the hotels from HPT for an initial term of 13 years with three, 15-year renewal options. The closing is the first part of the previously announced agreement, under which Candlewood will sell and leaseback A transaction whereby land is sold and subsequently rented by the seller from the purchaser who is the new owner. 16 Candlewood hotel properties to HPT for a total price of $135 million. Pursuant to long term renewable leases, the Company will operate the hotels as part of the Candlewood system. Candlewood expects to use the proceeds, after the repayment of debt and expenses, for the continued national expansion of its hotel brand. The transaction is expected to close in several phases and be completed by the end of 1998. Candlewood believes that the anticipated base rent coverage inherent in the sale-leaseback arrangement with HPT enables it to retain a significant portion of the hotels' cash flow after paying base rent to HPT. In addition, the leases enable Candlewood to retain 90% of the growth in hotel revenues for each hotel. Candlewood is the Wichita, Kan.-based owner, developer and franchisor of value-oriented, business extended-stay hotels. HPT is a real estate investment trust which has $1.6 billion of investments in hotels that are leased to unaffiliated hotel operating companies operating company A business that engages in transactions with outsiders. . In an unrelated announcement, former Vice President of Real Estate, Jeffrey F. Hitz, has been promoted to Senior Vice President Development. Hitz will be leading both the Real Estate and Construction divisions of Candlewood Suites Candlewood Suites is a brand name applied to hotels within the InterContinental Hotels Group. History The Candlewood Suites chain was started in 1995 by Jack Deboer, founder of the Residence Inn and co-founder of the Summerfield Suites chain. . The Company also announced the resignation of Larry Bowers Bowers is a surname, and may refer to
Candlewood Suites hotels target mid-market business travelers whose work keeps them on the road for more than a few days at a time. At the heart of the Candlewood concept is its commitment to providing exceptional value through amenities such as free local phone calls, 25-cent-per-minute long distance service, 25-cent soft drinks, free laundry facilities and an upscale exercise room. In keeping with its value-orientation and focus on the extended-stay business traveler, Candlewood's generously sized Studio Suite features a large business desk, two telephone lines, data ports and voice mail; a fully equipped kitchen with full-sized dishwasher, stove, microwave and refrigerator with ice maker; an over-sized reclining chair; a 25-inch television, video cassette recorder video cassette recorder Noun a device for recording and playing back television programmes and films video cassette recorder video n → Videorekorder m and CD player; and a fully tiled bathroom. The company's one-bedroom suite, which contains the same amenities, features a bedroom separate from the living room and kitchen. Candlewood Hotel Company, Inc., was formed in late 1995 as joint venture between Jack DeBoer and Doubletree Corporation (now Promus Hotel Corporation Promus Hotel Corporation was a hotel management and franchise company from Memphis, Tennessee. History Promus Hotel Corporation's beginnings are tied to the original Holiday Inn company in Memphis, Tennessee. ). DeBoer, who founded Residence Inns in the 1970s, is recognized in the hotel industry as the creator of the extended-stay concept. The Candlewood hotel system now includes 69 properties open or under construction nationwide. Please note: Except for historical information, this press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties, including but not limited to projected closing of transactions, timing and management of growth, the competitive environment and other risk factors as detailed in the company's filing with the Securities and Exchange Commission. Actual results may differ materially from the management's expectations. CONTACT: Candlewood Hotel Company, Inc., Wichita Warren Fix, Chief Financial Officer, 316/631-1300 |
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