WASHINGTON— MeriStar Hotels & Resorts announced that it has assigned the leases for 47 hotels to a subsidiary of Winston Hotels, the hotels owner, for $17 million. MeriStar will continue to manage 39 of these hotels for Winston under five-year contracts, terminable on the sale of an asset or for any reason after 12 months. Proceeds from the sale will be used to pay down MeriStars senior secured credit facility. “All of our leases have now been converted to management contracts as allowed by the REIT Modernization Act,” said John Emery, MeriStar president and chief operating officer. “As a result, we have significantly reduced the potential volatility of our future earnings and have more closely aligned our interests with those of Winston. This arrangement reflects a much better business model for both companies and offers advantages to both. We have had a long and successful relationship with Winston and look forward to opportunities to expand it in the future.” “We have a great deal of confidence in MeriStars ability to operate our hotels in this new arrangement and look forward to exploring future opportunities that benefit both companies,” said Jim Rosenberg, Winston president and chief operating officer.
