Host Marriott to Purchase Its Lease Rights

BETHESDA, MD-In a cash deal, Host Marriott Corp. is purchasing the lease rights to its portfolio of full-service hotels, according to company officials. Crestline Capital Corp., an independent hotel leasing company, holds the leases now. The transaction, expected to close at the beginning of 2001, will transfer ownership of Host Marriott Hotel leases owned by Crestline Capital to a subsidiary of Host Marriott for $205 million.

“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.