FelCor Divests Non-Core Asset - Analyst Blog
December 07 2011 - 8:15AM
Zacks
FelCor Lodging Trust
Inc. (FCH), a real estate investment trust (REIT) that
owns upper-upscale hotels, has recently sold the Holiday Inn
Toronto-Yorkdale hotel at Toronto, Canada, to the Easton Hotel
Group for CAD $22.9 million in cash.
The 370-room hotel is strategically
located in close proximity to downtown Toronto and Lester B.
Pearson International Airport and is adjacent to the Yorkdale
Shopping Centre – one of the largest and most exclusive malls in
the city. Besides its locational advantage, the hotel also boasts
of an outstanding reputation for fantastic food and beverage
selections, with multiple options to accommodate for every budget
and taste.
The asset sale was part of the
long-term strategy of FelCor to focus on a diversified portfolio of
high-quality hotels in major markets and resort locations that have
high barriers to entry and solid demand to drive healthy return on
investments.
Since December 2010, the company
has sold 9 non-strategic hotels in secondary and tertiary markets
primarily comprising mid-scale hotels for gross proceeds of $222
million. FelCor intends to utilize the proceeds from the asset sale
to repay its debt to reach its desired leverage target. As of
September 30, 2011, the company had a staggering consolidated debt
of $1.6 billion
FelCor presently owns 76 hotels and
resorts in 22 states in the U.S. and Canada under
globally-recognized brands such as – Embassy Suites Hotels,
Doubletree, Hilton, Marriott, Renaissance, Fairmont, Sheraton,
Westin and Holiday Inn.
We currently have a ‘Neutral’
recommendation on FelCor, which has a Zacks #3 Rank that translates
into a short-term 'Hold' recommendation and indicates that the
stock is expected to perform in line with the overall U.S. equity
market for the next 1–3 months. We also have a ‘Neutral’
recommendation and a Zacks #3 Rank for Host Hotels &
Resorts Inc. (HST), one of the competitors of FelCor.
FELCOR LODGING (FCH): Free Stock Analysis Report
HOST HOTEL&RSRT (HST): Free Stock Analysis Report
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