FelCor Lodging Trust Inc.
), a real estate investment trust (REIT) that owns upper-upscale
hotels, has recently sold two non-strategic hotels to an unnamed
company for $70.0 million. The purchaser has paid $2.1 million cash
as deposit money for the transaction, while the balance is expected
to be paid when the sale consummates in October.
FELCOR LODGING (FCH): Free Stock Analysis
HOST HOTEL&RSRT (HST): Free Stock Analysis
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FelCor has divested Embassy Suites - New Orleans-Convention Center
hotel in New Orleans, Louisiana; and Embassy Suites -
Nashville-Airport in Nashville, Tennessee. The 370-room Embassy
Suites - New Orleans-Convention Center hotel is located in the
heart of the city's busy cultural center, in close proximity to the
Port of New Orleans.
On the other hand, Embassy Suites - Nashville-Airport hotel is
located at an easy commutable distance from the Nashville
International Airport; and from the business and entertainment
district of downtown Nashville. Besides the locational advantage,
both the hotels also boast of an outstanding reputation for its
food and beverage selections, with multiple options to accommodate
every budget and taste.
The company intends to utilize the proceeds from the divestiture to
pay the balance $37.7 million of its accrued preferred dividends
when it pays the regular quarterly preferred dividends on October
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 up for
sale in its portfolio, out of which a total of 18 hotels were sold
since December 2010.
FelCor currently owns 69 hotels and resorts in 22 states in the
U.S. under globally recognized brands such as - Embassy Suites
Hotels, Doubletree, Hilton, Marriott, Renaissance, Fairmont,
Sheraton, Westin and Holiday Inn.
We 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
Host Hotels & Resorts Inc.
), one of the competitors of FelCor.