| Reston-based REIT on hotel buying spree
Virginia Business
November 2004
Highland
Hospitality may not be as famous — or as frivolous
— as, say, Paris Hilton, but it does know a thing
or two about being a shopaholic.
The Reston-based real estate investment trust, formed
through an IPO last December, has been on a buying spree
since the first of the year, spending $590 million for
17 high-end lodging properties in 10 states. Among its
purchases: the Crowne Plaza Hotel Atlanta-Ravinia; the
Hyatt Regency Wind Watch Hotel in Long Island, N.Y.;
the Courtyard Denver Airport Hotel; the Dallas/Fort
Worth Airport Marriott; the Tremont Boston Hotel; and
the Radisson Mount Laurel Hotel in Mount Laurel, N.J.
CFO Doug Vicari says the company is perfectly positioned
to take advantage of a recovering business travel market
and “what we feel are going to be some very favorable
trends over the next three to five years.”
Highland Hospitality isn’t your typical REIT,
though. For one thing, it’s run by a well-connected
management team, including former executives for Marriott
International, Host Marriott, Crestline Capital Corp.
and other major players in the lodging industry. And
with startup funds of nearly $350 million, the company
has money to burn, giving it an edge over competitors.
“Having that capital available to us has left
us with a lot of flexibility and really made the market
aware that we are a kind of preferred buyer,”
he says.
With nearly 5,000 rooms in high-demand markets, Highland
Hospitality is already enjoying a positive cash flow.
The company paid dividends for the first three quarters
of 2004 and expects to pay 14 to 16 cents per share
in December.
Short-term goals include purchasing another three properties
before the end of the year, tapping the public markets
a second time and moving into the international realm
— most likely Mexico — as early as next
year. “We see these as very opportunistic and
beneficial times to be a hotel owner,” Vicari
says.
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