Host Hotels & Resorts, Inc.
) disclosed the sale of a large stake in a Philadelphia hotel.
The move comes as this hotel real estate investment trust (REIT)
continues to lower its exposure to non-core assets.
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In particular, Host Hotels offloaded an 89% stake in the entity,
which owns the Philadelphia Marriott Downtown. The sale took
place based on a gross entity value of $303.4 million. An 11%
stake is, however, retained by Host Hotels in the joint venture
along with Clearview and funds managed by Oaktree Capital
As a matter of fact, for Host Hotels the West Coast market
remains attractive with strong lodging demand and lower supply.
But an expected rise in supply in the East Coast in the upcoming
year is a matter of concern.
Moreover, in the East Coast, the company experienced declines in
group demand in Philadelphia and Washington, DC in the most
recently reported quarter. Hence, the shedding of this stake is a
strategic one for this Zacks Rank #2 (Buy) stock.
Host Hotels is well on track to improve its overall portfolio
through the execution of its strategic capital recycling program.
The company is focusing on strengthening its position in vibrant
markets globally and reducing exposure to non-target markets.
In recent times, the company disclosed the vending of the
Dallas/Addison Marriott Quorum for $55.7 million as well as the
$62 million divestiture of the Four Seasons Hotel Atlanta and the
associated office space. Notably, the current sale leads to total
dispositions of approximately $1.1 billion since the start of
Encouragingly, recently Host Hotels hiked its quarterly cash
dividend by 8.3% sequentially to 13 cents per share, reflecting
the12th consecutive quarterly dividend increase. The increased
dividend will be paid on Jan 15, 2014 to shareholders of record
as of Dec 31, 2013. Notably, the company's history of increasing
its quarterly dividend reflects its long-term strategy to provide
attractive risk-adjusted returns to shareholders.
Investors interested in the REIT Equity Trust - Other industry
may also consider stocks like
Getty Realty Corp.
National Health Investors Inc.
Pebblebrook Hotel Trust
). All these carry a Zacks Rank #1 (Strong Buy).