Sandalwood Lodging Chimes In About Strategic Partnership With Barcelo Crestline

POTOMAC, MD— Sandalwood Lodging Investment Corp., a real estate investment company focused on the lodging industry, shared more specific financial data with HOTEL BUSINESS® regarding its strategic partnership with Barcelo Crestline Corp., a hotel management company. Sandalwood said it plans to invest up to $220 million in the acquisition of full-service hotels throughout the U.S. The company plans to raise the money through a public offering of common shares and then use the proceeds to create a fund for the acquisitions. In addition, Barcelo will buy $3 million worth Sandalwood common stock to get the fund off the ground in exchange for first dibs on the management rights to all the hotels acquired through the money from said fund. “We’re looking to invest in the full-service segment,” Sara Michele, director of investor relations at Sandalwood, told HOTEL BUSINESS®. “We have no geographic location in mind, but we will concentrate on full-service hotels that have been in operation for at least one year.” Michele stated that Sandalwood plans to begin buying hotels once the fund reaches $50 million. However, she would not comment on the status of the fund at present. As reported yesterday, Sandalwood and Barcelo have entered into a strategic partnership to buy and operate full-service hotels as a unit. As to why Sandalwood was in the market for a management partner to begin with, Michele stated that “going forward we didn’t want to deal with the management side of an acquisition because we wanted to be freed up to give each acquisition more attention. As a result, we were looking to form a strategic partnership with a medium-size, high-quality management company.” The executives at Sandalwood and Barcelo also go back a long ways to their days at Host Marriott, which is another reason why Douglas Greene, vice chairman and CIO of Sandalwood, approached Barcelo about forming this strategic partnership. Specifically, Greene went to Barcelo late last year and the deal was finalized by December 2002.