FAIRFIELD, NJ? Prime Hospitality Corp. announced it will convert 27 Sumner Suites to its AmeriSuites brand under an agreement with Sholodge. It will also purchase two land sites from Sholodge to develop two more AmeriSuites properties. The transaction is expected to close this month and will grow the size of the AmeriSuites chain by 30%, according to A.F. Petrocelli, chairman/CEO of Prime. There are currently 100 AmeriSuites operating. The move is part of Prime?s plan to focus on the growth of its proprietary AmeriSuites (all suites) and Wellesley Inn & Suites (limited service) brands. As part of that initiative, the company has been divesting its hotel real estate and shifting its focus from that of an owner/operator to a franchisor/manager of its brands, Petrocelli said. ?By late 2000, will we have 200 AmeriSuites open, in construction or committed for franchise agreements,? said Douglas Vicari, Prime?s senior vp/CFO. ?With the Wellesley brand, by the middle of 2001, we will have 100 open, in construction or committed for franchise agreements.? There are now 66 Wellesley hotels ?and we are in the process of converting three other properties from different brands,? Vicari said. Under the agreement with Sholodge, Prime will acquire the leasehold interests on the Sumner Suites which are located in 12 states. Prime will operate the hotelsunder lease agreements with Hospitality Properties Trust (HPT) and Sholodge. The properties, all recently constructed by Sholodge, will be converted to AmeriSuites over the next several months. Petrocelli noted that the hotels are ?substantially identical in nature? to existing AmeriSuites. ?Conversion items are expected to be minimal,? he said.?By leasing 27 hotels, we are able to grow our brand without raising capital or adding real estate,? he added. The land sites which Prime is purchasing are located in Mt. Laurel, NJ and Sterling, VA. A Sholodge affiliate will construct AmeriSuites hotels on the sites. In other news, Prime said it has sold its interests in its remaining five HomeGate hotels to subsidiaries of the Amerand Corp., a hotel operator in Texas. The purchase price was $17.7 million which includes the transfer of $17.4 million of first mortgage debt. The hotels, all in Texas, comprise the last remaining HomeGate hotels owned by Prime. In November 1999, Prime converted 38 HomeGate properties to its Wellesley Inn & Suites brand. Prime also recently completed the sale of its Chicago/Warrenville AmeriSuites hotel to First WRN, LLC, an affiliate of of First Hospitality Corp., a hotel owner/operator based in Des Plaines, IL, for $10.8 million. The hotel will be managed by First Hospitality Corp. and operated as an AmeriSuites under a 20-year franchise agreement. The sale of the Chicago/Warrenville AmeriSuites was Prime?s 10th AmeriSuites hotel disposition in the past 15 months. Prime also recently sold its Frenchman?s Reef Marriott Resort in St. Thomas, U.S. Virgin Islands, to Marriott International for $73 million in cash. Marriott will manage the operations of the hotel.
