BEVERLY HILLS, CA— Hilton Hotels Corp. from May to July sold 11 properties for $416 million, and intends to sell an additional eight. Net proceeds after property level debt repayment, minority partner distributions, selling costs and income taxes totaled approximately $335 million. All properties are remaining in the Hilton system either through long-term franchise or management agreements. The transactions and their selling prices include: the 230-suite Hilton Suites in Anaheim, CA; 226-suite Hilton Suites in Phoenix, AZ; and 216-suite Embassy Suites in Cleveland (combine $72 million); the 353-room Doubletree Hotel in Bellevue, WA ($48.5 million); the 500-room Hilton Alexandria, VA ($93.1 million); the 407-room Hilton Charlotte, NC ($56 million); the 351-room Hilton Glendale, CA ($79.8 million); the 203-suite Hilton Suites in Brentwood, TN ($6.5 million); the 405-room Hilton in East Brunswick, NJ ($43 million); and two Homewood Suites by Hilton hotels, a 137-room property in Ft. Worth, TX, and a 121-room property in Nashville, TN, that sold for a combined $17.2 million. On a combined basis and based on trailing 12-month earnings before interest, taxes, depreciation and amortization (EBITDA) (net of fees), the 11 hotels sold at an EBITDA multiple of 13 times. Including capital that the respective buyers have committed to investing in the properties, the trailing 12-month EBITDA multiple was 14.6 times. After adjusting for a normal replacement for furniture, fixtures and equipment, the implied capitalization rate on the sales was 6.3%, and 5.7% when adjusted for the additional reinvestment capital. The combined per-room sales price was approximately $132,000. The additional eight properties for sale include: the 600-room Hilton Anchorage, AK; the 385-room Hilton Boston Back Bay; the 395-room Hilton Dallas-Ft. Worth Lakes; the 821-room Hilton Minneapolis; the 585-room Hilton Pointe Resort Tapatio Cliffs in Phoenix; the 782-room Hilton Portland in Oregon; the 357-room Hilton San Diego Mission Bay, and the 713-room Hilton Pittsburgh. The company expects the majority of these sales to be completed by year’s end and anticipates retaining management or franchise agreements on the majority of the properties.
