Host Hotels maintains that if the Starwood hotels were included in the results for both periods, RevPAR would have grown 13% during the quarter compared with last year. Its forecasts for 2006 include hotel RevPAR to increase approximately 9% to 10% for the third quarter and 8.5% to 10% for the full year.
"We significantly exceeded the high-end of our expectations and analysts' consensus estimates by posting another quarter of strong RevPAR and margin growth," Christopher J. Nassetta, president and chief executive officer, says.
The company acquired 25 domestic hotels and three foreign hotels from Starwood, for $3.1 billion in April. That month the company issued $800 million of 6-3/4% Series P senior notes due 2016 for net proceeds of approximately $787 million, which were used to fund a portion of the Starwood acquisition.
In May, the company signed a definitive agreement to purchase The Westin Kierland Resort & Spa in Scottsdale, AZ, for approximately $393 million, including the assumption of $135 million of mortgage debt with an interest rate of approximately 5.08%. The sale is expected to close in the third quarter . Host Hotels is financing $260 million of this transaction in cash. According to its earnings statements, as of June 16, 2006, the company had $524 million of cash and cash equivalents, and $575 million of availability under its credit facility.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
