FORT MITCHELL, KY— According to a recent report, Adams Mark Hotels has agreed to sell six of its 24 properties to Columbia Sussex, a hotel owner/operator based here. The report said Columbia Sussex entered a contract Nov. 28 to acquire Adams Mark hotels in Memphis, TN; Houston; Philadelphia; Columbia, SC; Clearwater, FL; and Colorado Springs, CO. A price for the transaction, which includes a total of about 2,400 rooms, was not disclosed. Fred Kummer Jr., chief executive of HBE Corp., which owns the Adams Mark chain, said last week that the terrorist attacks Sept. 11 prompted him to try to sell some hotels to raise cash. The attacks have reduced travel sharply and hotel stays nationwide. Kummer declined to provide details about his plans to sell parts of his Creve Coeur-based chain, which he launched in the 1970s. Adams Mark has also suffered from allegations of racial discrimination, but recently settled a case in which those allegations were made, which had been pending for some time. Kummer confirmed the deal Monday, Dec. 10 through a spokesman but declined to comment further, the report said. Some say given todays market conditions, the sale price is likely to be far below what it would have been even a year ago. To begin with, the value of hotel properties has sunk because occupancy rates began falling last spring and then plummeted after the attacks. In addition, lenders are not making capital available to finance hotel deals, a fact that further depresses hotel prices. Selling at this time suggests that Adams Mark has a serious need for cash, though other hotel chains face similar woes, said Gary Andreas of Chesterfield-based hotel and health-care consulting firm Tellatin, Andreas & Short. Andreas said he had not expected Kummer to part with the hotel in Colorado Springs, which he called a “jewel.” Bill Yung III, president of Columbia Sussex Corp. said the deal, which is expected to close late next month, is still dependent upon winning approval from lenders to replace HBE as the borrower on loans for the hotels. He did not elaborate on the financing, though he said some lenders have agreed to the change. If the lenders do not agree, “that would stop the deal,” he said. Yung said Columbia Sussex plans to operate the six hotels under the names of other chains. The company operates 54 hotels under franchises such as Marriott, Crown Plaza and Radisson.
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