Prime Hospitality makes $200M expansion commitment.
Citing statistics from Arthur Andersen and Smith Travel Research, which forecast growth and profitability in the all-suites and limited service segments, Simon said Prime plans aggressive expansion of its proprietary brands; AmeriSuites (all-suites) and Wellesley Inns (limited service).
He reported that new AmeriSuites have opened in Brentwood, TN and Flagstaff, AZ and construction has begun on AmeriSuites in Columbus, OH, Kansas City, KS and Louisville, KY. Twelve AmeriSuites are contemplated as part of a joint venture with ShoLodge and Prime intends to build an additional ten.
The company plans to focus on Florida and the Mid-Atlantic for the dozen or so additional Wellesley Inns it intends to add. It recently announced the opening of a new Wellesley Inn in Orlando and its plan to develop another property in Ft. Lauderdale (Sawgrass), Florida by year-end. Additional sites in Tampa and Lakeland, FL are being considered.
Other changes in the company's portfolio include the purchase of the Ramada Hotel in Meriden, CT and plans for its extensive renovation this year; and three re-positionings, including renaming and renovating the Sheraton Hotel, Fairfield, NJ to Radisson Hotel & Suites and re-flagging Howard Johnson Plaza Hotels in Las Vegas and Portland, OR as Holiday Inn Crowne Plaza hotels. Prime also sees a window of opportunity for purchasing full service hotels at attractive prices.
The total development commitment is $200 million - $120 million for development and $80 million to retire existing debt owed to creditors. Prime expects that financing to come partly from mortgages on approximately 12 properties it owns which are completely unleveraged. Other financing is expected to come from local banks and sellers in markets Prime is entering. Simon reported a 4 point increase in occupancy year-to-date and a 5 percent increase in rate, contributing to a 9.7 percent increase in revenues. In the process of the company's Chapter 11 reorganization, debt was reduced from $700 million to $180 million. Since emerging from Chapter 11 last July, Prime has posted four consecutive profitable quarters.
Headquartered in Fairfield, New Jersey, Prime Hospitality Corp. (NYSE, "PDQ") is one of the nation's largest independent operators of hotel properties. Prime owns or manages over 80 hotel properties throughout the US, representing brands including Marriott, Sheraton, Radisson, Ramada, Holiday Inns, Days Inns, and Howard Johnson, in addition to its proprietary brands AmeriSuites and Wellesley Inns.
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|Title Annotation:||plans to increase real estate portfolio by 50%|
|Publication:||Real Estate Weekly|
|Date:||Dec 15, 1993|
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