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ARLINGTON, VA-MeriStar Hospitality Corp. has refinanced an existing $300-million CMBS loan that was secured by 19 of its 71 properties. The new refinancing package, placed through Lehman Brothers, amounts to an aggregate $317 million and consists of a $312-million CMBS loan secured by 18 of the 19 properties involved in the original transaction. There is also a $15 million term loan collateralized by a single hotel.

MeriStar CFO Donald D. Olinger says the transaction "reduces our expected annualized interest expense by more than $9 million." The transaction leaves the company with $45 million in cash presently held in escrow, and the opportunity to tap into cash flow from property operations in the future.

"We now have the flexibility to sell assets included in the collateral group that do not fit with our long-term strategy, generating proceeds to further reduce our debt while at the same time reducing our future capital requirements." MeriStar did not specify which properties it intends to market, but officials note in the release on the new refinancing that, given the favorable market conditions and "expressed interest" in certain properties, the REIT will increase its disposition efforts.