"The consummation of this transaction, which is permitted as a result of the passage of the REIT Modernization Act, will simplify our corporate structure and enable us to better control our portfolio of premier full-service hotels," says Christopher J. Nassetta, Host Marriott president and CEO. "The transaction is expected to be accretive to 2001 FFO per share by $0.06 to $0.07."
The REIT Modernization Act, which passed on Dec. 17, 1999 and takes effect on Jan. 1, 2001, in part, allows lodging REITs to lease their hotels to subsidiaries of the REIT.
Bruce D. Wardinski, Crestline Capital chairman of the board, president and CEO says, "While these leases have been profitable for Crestline, they are more appropriately held by the owner of the hotel. The final purchase price is consistent with our full-year 2000 estimated leakage, which is lower than prior expectations."
According to Wardinski, Crestline will use the cash proceeds to continue implementing their dual strategy of growing their hotel management business and purchasing itsw stock. Funds will be used to tender an offer for its common stock in the first quarter of 2001.
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