Marriott Sells Land for $246M

WASHINGTON, DC-Marriott International Inc. has pocketed $246 million in cash as the result of the disposition of a portfolio of land beneath 75 Courtyard by Marriott hotels. The locally based lodging company sold the parcels to CBM Land Joint Venture LP, an entity featuring Sarofim Realty Advisors as the majority owner and representative of an unnamed institutional investor. In another move, Marriott sold CBM Land JV $40 million worth of land underlying nine more Courtyard properties. The move allows Marriott to maintain a 23% equity interest in the joint venture.

Marriott executive vice president and CFO Arne M. Sorenson says the deal “meaningfully benefits our return on invested capital moving forward and aligns well with our strategy of creating value through managing hotels rather than owning real estate.” Marriott will incur a $17-million, one-time pre-tax gain for 2005. And while the loss of rent will lead to a $20.7-million reduction in operating income, interest expense savings and equity earnings totaling $18.1 million will nearly balance out the losses.