FelCor Lodging Trust Inc.
) - a real estate investment trust - is on a spree of making
divestitures. The company sold the 244-room DoubleTree hotel in
Wilmington, Del. for $27.7 million and also inked a deal to sell
the 277-room Embassy Suites hotel in Jacksonville for $10
million. The company would use the funds generated through the
sale of these assets for repaying its debt.
The sale of the Embassy Suites hotel is expected to be completed
in October and a non-refundable deposit toward the purchase price
has already been paid by the buyer. Last month, FelCor has
announced the selling of the 223-room Embassy Suites hotel in
Baton Rouge for $20 million.
Notably, the asset sell off help in strengthening FelCor's
balance sheet and leverage ratios, thereby providing greater
financial flexibility. It is part of the company's long-term
strategy to reposition its portfolio through the divestiture of
non-strategic assets and investment in high-quality hotels in
major markets to drive healthy return on investments.
FelCor is disposing 39 non-strategic hotels, as part of its
long-term strategy. Of this, the company would have sold 24
(including the above-mentioned dispositions) of the 30 hotels
brought to market since Dec 2010 for around $530 million. Another
3 hotels are currently in the negotiation stage.
As of Jun 30, 2013, FelCor had $1.7 billion of consolidated debt
bearing a 6.3% weighted-average interest rate and a seven-year
weighted-average maturity. The company's cash and cash
equivalents as of that date were $66.2 million, ahead of $45.7
million as of Dec 31, 2012. We expect such strategic moves to
position FelCor Lodging favorably, going forward.
FelCor Lodging currently owns 62 upper-upscale full-service
hotels and resorts under globally recognized brands such as
Embassy Suites Hotels, Doubletree, Marriott, and several others.
Most of the properties of the company are located in major
markets across the U.S.
FelCor Lodging currently carries a Zacks Rank #3 (Hold). A number
of promising stocks that are worth a look include
Getty Realty Corp.
Sotherly Hotels Inc.
Sovran Self Storage Inc.
), all carrying a Zacks Rank #1 (Strong Buy).
FELCOR LODGING (FCH): Free Stock Analysis
GETTY REALTY CP (GTY): Free Stock Analysis
SOTHERLY HOTELS (SOHO): Get Free Report
SOVRAN SLF STOR (SSS): Free Stock Analysis
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