The Cleveland-based hotel REIT says the sale is part of its continuing effort to upgrade its portfolio mix by disposing of non-core assets. In July, Boykin sold its Springfield, OR hotel for $6.5 million. "Total proceeds from property sales year to date of nearly $30 million will enable us to finance strategic acquisitions through the redeployment of capital," says Boykin chairman and CEO Robert Boykin.
Boykin may also be losing one hotel it didn't plan on selling. The company was recently notified that the City of Portland may seek to acquire, through its power of eminent domain, the Doubletree Portland Downtown Hotel for the purpose of student housing, academic, retail and conference uses for Portland State University. To date, the city has not formally initiated condemnation proceedings; however, they have taken the first step by annexing the property into one of the city's renewal areas.
"In the event that the PDC does initiate such proceedings, we have been advised that they have the right to take the property for just compensation, determined by the fair market value of the property," states the company in its latest quarterly report. In the company's most recent annual report, the hotel had a net book value of $20 million.
In April, Boykin and Hilton Hotels agreed to terminate a long-term management agreement related to the 10 Doubletree hotels managed by Hilton. The existing management agreement was originally scheduled to terminate in 2012; however, Hilton had the right to extend the agreement for up to 10 five-year terms, making the management agreement an effective 59-year encumbrance on the properties. The termination is occurring in phases and is expected to be complete by the end of 2003.
Last month, in connection with the management termination agreement, Hilton ceased management of Boykin's Doubletree Bellevue in Bellevue, WA. Boykin subsequently entered into an agreement with BMC to manage the property. The management agreement is for a term of five years and is cancelable by us without penalty upon 90-days notice. BMC now manages 24 of the company's 29 hotels.
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