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PROPERTY TRUST OF AMERICA ANNOUNCES COMPLETION OF HOLIDAY INN, FISHERMAN'S WHARF ASSEMBLAGE AND SALE OF THREE NON-MULTIFAMILY ASSETS

 PROPERTY TRUST OF AMERICA ANNOUNCES COMPLETION OF HOLIDAY INN, FISHERMAN'S WHARF ASSEMBLAGE AND SALE OF THREE NON-MULTIFAMILY ASSETS
 EL PASO, Texas, July 1 /PRNewswire/ -- Property Trust of America (NYSE: PTR) announced today that it has purchased the remaining 91 percent interest in the land underlying PTR's Holiday Inn Hotel at Fisherman's Wharf in San Francisco. The acquisition of the remaining land completes the assemblage of PTR's ownership in this outstanding income producing property. The first phase of PTR's investment in the property was a 50 percent building leasehold investment made in 1971. Completion of the assemblage commenced in 1990 with the purchase by PTR of its partners' 50 percent interest in the building leasehold and the purchase of a 9 percent interest in the underlying land. Today's acquisition of the remaining land culminates significant strategizing and recent negotiations to complete ownership and control of the entire asset.
 The Holiday Inn has historically been the best performing asset in PTR's portfolio. The lease income is tied to gross hotel revenues without offset for the on-going capital expenditures or operating costs of the hotel. As important, the property's superior location in one of the top domestic and foreign tourist destinations in the United States makes the location and hotel very difficult to replicate. As important for the future, the land acquisition will maximize the total value of PTR's investment in the asset and is a key part of PTR's strategy of positioning the property for ultimate sale at the highest possible price. Without the assemblage, PTR's land lease would have expired in 2018.
 PTR's total investment in the property will be $22.8 million including the acquisition of the land for $11.75 million all cash, its largest single investment. PTR's total investment in the property will be $67,550 per room, or approximately 50 percent of replacement cost. In the event comparable land could be assembled at San Francisco's Fisherman's Wharf, recent estimates of replacement cost today for a similar quality hotel are between $135,000 to $150,000 per hotel room.
 PTR plans to commence discussions to sell the property to one of a group of foreign tour operators, among others, who would potentially benefit from their ability to positively influence occupancy and room rates. Proceeds from a transaction would be redeployed via a tax free exchange by PTR into multifamily properties located in PTR's southwestern target market and selected by PTR's Advisor, Southwest Realty Advisors Incorporated. During 1991 the hotel's average occupancy was 88 percent and the average room rate was $89.
 C. Ronald Blankenship, chairman of the board of PTR, noted that the strong operating results and positive spreads being achieved in PTR's multifamily properties will more than offset any short-term opportunity cost to PTR's Funds from Operations related to this acquisition (estimated at less than 1 cent per share per quarter). Blankenship stated further that, more importantly, the consummation of a successful sale transaction could result in a material positive impact on PTR's future Funds from Operations.
 As previously announced, periodic sales of its non-multifamily assets may occur as PTR implements its strategy of becoming the leading multifamily owner in the southwestern United States. PTR has completed the sale of three non-multifamily assets, the Meadowlark Shopping Center in Denver, Colo., the Midway Industrial Building in Dallas, Texas and the Sheridan Shopping Center in El Paso, for a combined sales price of $3.34 million. The three transactions resulted in a combined capital gain which was not material and does not impact PTR's Funds From Operations. The Advisor is continuing its efforts to position PTR's remaining non-multifamily properties for improved performance and potential opportunistic sales in the future and believes that, in the aggregate, PTR will realize at least the net book value on assets sold.
 PTR's Advisor, Southwest Realty Advisors Incorporated, has completed transactions since January 1, 1992 on behalf of PTR for 2,387 multifamily units, which represent a total investment of $73.8 million. PTR's opportunities for multifamily investment continue to be very favorable. PTR currently has under contract or letter of intent, subject to final due diligence, an additional 2,839 units with an approximate total investment value of $82.5 million.
 Within the last 60 days Merrill Lynch, A. G. Edwards and Sons, Inc. and Kidder, Peabody have issued BUY recommendations on PTR. Copies of these research reports are available directly from the brokerage offices of these investment banks.
 PTR is an equity real estate investment trust ("REIT") which invests in multifamily properties in its 12 city target market in the southwestern United States. PTR's Advisor is Southwest Realty Advisors Incorporated, which is an affiliate of PTR's largest shareholder (20.8 percent), Realty Growth Investors Incorporated. The Advisor's management team is focusing PTR's efforts on acquiring, developing and operating multifamily housing that will compete very effectively in each specific market place over the long term, as well as producing high initial and growing Funds from Operations which will maximize quarterly dividend growth to shareholders.
 -0- 7/1/92
 /CONTACT: James H. Polk III or Jeffrey A. Cozad of Southwest Realty Advisors, 1-800-982-9293/
 (PTR) CO: Property Trust of America ST: Texas, California IN: SU:


SH -- NY043 -- 5599 07/01/92 10:39 EDT
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Publication:PR Newswire
Date:Jul 1, 1992
Words:869
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