RLJ Lodging Fund II, LP Acquires 63 Hotels From White Lodging Services for $1 Billion
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RLJ Lodging Fund II, LP Acquires 63 Hotels From White Lodging Services for $1 Billion
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Category: North America & West Indies / Carribean islands
This is a press release selected by our editorial committee and published online for free on 2006-06-16
Privately held RLJ Development, LLC (“RLJ Development”) controlled by Robert L. Johnson, founder of BET and owner of the NBA Charlotte Bobcats, announced today that it has signed a definitive agreement to acquire 100 hotels from White Lodging Services Corporation (“WLS”) and its affiliates for approximately $1.7 billion.
A first group of 87 hotels is expected to close in the second quarter of 2006. The remaining 13 hotels, which are currently under construction or recently completed, are scheduled to close over the next 18 – 24 months. WLS will retain management of the hotels under long-term management agreements and the hotels, which are primarily leading brand franchises including Marriott and Hilton, will continue to operate under the same brand affiliations with long term franchise agreements also in place.
“We are thrilled to add these hotel properties to the RLJ Development portfolio,” stated Robert L. Johnson, CEO and Chairman of RLJ Development, “In addition, we are excited about continuing and expanding our relationship with Bruce White and the White Lodging organization. I consider Bruce and his management team the best hotel management group in the country.
”Bruce White, Chairman and CEO of WLS, stated “this transaction is consistent with White Lodging's objectives to create value in our operating company, generate liquidity for accelerated future growth in addition to an active development pipeline already in place totaling over forty projects, and to provide a foundation for long term stability. We are pleased to expand on our existing relationship with RLJ, who we have come to respect as consummate professionals, and look forward to continued growth as we work together to enhance the value of this high quality portfolio.
”Thomas J. Baltimore, Jr., President of RLJ Development added, “This acquisition is consistent with our strategy to invest in upscale, focused service hotels with premium brands in desirable markets. Furthermore, the WLS portfolio is relatively young and a majority of the hotels are located in recovering markets with substantial growth potential. This is the type of profile that RLJ Development has consistently excelled in within our existing portfolio.
”The WLS portfolio acquisition marks the second deal over a billion dollars lead by Robert L. Johnson. The first was the sale of Black Entertainment Television to Viacom, Inc. for $3 billion in January 2001. RLJ Development will become one of the largest Marriott franchisees in the United States with over 85% of the WLS portfolio properties affiliated with the Marriott family of brands.
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