UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 1, 1998
LASALLE HOTEL PROPERTIES
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 1-14045 36-4219376
- ------------------------ -------------------- ---------------
(State or other juris- (Commission File (IRS Employer
diction of incorporation Number) Identification
or organization) No.)
1401 Eye Street, NW, Suite 900, Washington, D.C. 20005
- ------------------------------------------------ ----------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 212/661-6161
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
This Form 8-K/A is being filed to report financial information regarding
the San Diego Princess Resort, the acquisition of which was reported in the
Form 8-K filed June 15, 1998, which this form amends.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 1, 1998, LaSalle Hotel Properties (the "Company") acquired an
interest in the San Diego Princess Resort (the "Property") through an
indirect, majority owned subsidiary, LHO Mission Bay Hotel, L.P. (the
"Purchaser"). The Purchaser is a limited partnership organized under the
laws of the state of California, of which LaSalle Hotel Operating
Partnership, L.P. (the "Operating Partnership") holds an approximate 95.1%
general partnership interest and WestGroup San Diego Associates, Ltd.
("WestGroup") holds an approximate 4.9% limited partnership interest. The
Property was acquired from VVH Resorts, Ltd. for an aggregate purchase
price of $73 million (the "Purchase Price") pursuant to a Purchase and Sale
Agreement with Joint Escrow Instructions. The Property was renamed the San
Diego Paradise Point Resort and the Company expects to invest up to $8
million in capital improvements over the next two years to renovate and
reposition the Property.
On April 30, 1998, the Board of Trustees of the Company, including all
of the Independent Trustees (i.e., the Trustees of the Company who are
neither officers of the Company nor affiliated with the Company), acting in
the Company's capacity as sole general partner of the Operating
Partnership, authorized the Operating Partnership to purchase an interest
in the Property.
The Property is 51-acres and has nearly one mile of beachfront and 462
guestrooms in 129 single-story villas. The Property is subject to a 50-year
ground lease from the City of San Diego with 46 years currently remaining
on the term. The Property is located in the heart of Mission Bay on
Vacation Island, a 4,600-acre aquatic park in southwest San Diego County.
The Property is minutes away from the San Diego International Airport and
convenient to many major San Diego tourist attractions including Sea World,
Old Town, Downtown San Diego, the San Diego Convention Center, Qualcomm
Stadium and the San Diego Zoo.
The Purchase Price was funded with proceeds from a borrowing under the
Company's $200 million senior unsecured revolving credit facility from
Societe Generale, Southwest Agency, The Bank of Montreal, Chicago Branch,
and the other banks party thereto and from the proceeds of the sale of
112,458 common shares of beneficial interest, $.01 par value (the "Common
Shares"), for $17.78438 per share to WestGroup, an affiliate of Noble House
Hotels & Resorts ("Noble House"), which will operate the Property pursuant
to the terms of a participating lease (the "Participating Lease").
The Company based its determination of the Purchase Price on the
expected cash flow, physical condition, location, competitive advantages
and potential of improved revenues. The Company did not obtain an
independent appraisal on the Property. The Property was operated prior to
the acquisition as a resort hotel, and the Company expects to continue to
operate it as a resort hotel.
ITEM 5. OTHER EVENTS
In connection with the purchase of the Property, and as discussed in
Item 2, WestGroup, an affiliate of Noble House, acquired 112,458 Common
Shares from the Company at a per share price of $17.78438. The purchase by
WestGroup was a condition to the selection of Noble House as operator of
the Property, and the Common Shares have been pledged to the Operating
Partnership to secure Noble House's obligations under the Participating
Lease. Such sale was made in reliance on an exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) and (b) Financial Statements of Property Acquired and Pro Forma
Financial Information
The financial statements, listed in the table of contents thereto, of
VVH Resorts Limited Partnership (San Diego Paradise Point Resort) are
included herein. The pro forma financial information required by Item 7(b)
has been filed in conjunction with the Company's quarterly report on Form
10-Q for the quarterly period ended June 30, 1998, and therefore, is not
provided in this Form 8-K/A
(c) Exhibits
A list of exhibits is set forth in the Exhibit Index which immediately
precedes the exhibits and which is incorporated by reference herein.
<PAGE>
VVH RESORTS LIMITED PARTNERSHIP
(SAN DIEGO PARADISE POINT RESORT)
Financial Statements
December 31, 1997 and 1996
Table of Contents
Page(s)
-------
Independent Auditors' Report. . . . . . . . . . . . . . . . 5
Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . 6
Statements of Operations. . . . . . . . . . . . . . . . . . 7
Statements of Changes in Partners' Capital. . . . . . . . . 8
Statements of Cash Flows. . . . . . . . . . . . . . . . . . 9-10
Notes to Financial Statements . . . . . . . . . . . . . . . 11-14
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees
LaSalle Hotel Properties:
We have audited the accompanying balance sheets of VVH Resorts Limited
Partnership (San Diego Paradise Point Resort) as of December 31, 1997 and
1996, and the related statements of operations, partners' capital and cash
flows for each of the years in the three-year period ended December 31,
1997. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of VVH Resorts Limited
Partnership (San Diego Paradise Point Resort) as of December 31, 1997 and
1996, and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 1997, in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
San Diego, California
June 29, 1998
<PAGE>
<TABLE>
VVH RESORTS LIMITED PARTNERSHIP
(SAN DIEGO PARADISE POINT RESORT)
Balance Sheets
December 31, 1997 and 1996
<CAPTION>
1997 1996
------------- -----------
<S> <C> <C>
Assets
------
Current assets:
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 38,102 13,697
Accounts receivable, less allowance for doubtful accounts
of $6,516 and $17,380, respectively . . . . . . . . . . . . . . . . 1,152,871 726,760
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,354 242,340
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 238,991 166,210
----------- ---------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 1,670,318 1,149,007
Leasehold improvements and equipment, net (note 2). . . . . . . . . . . 28,327,439 27,801,748
Leasehold interests, net of accumulated amortization
of $6,386,370 and $6,004,931, respectively (note 6) . . . . . . . . . 17,864,071 18,245,510
----------- ----------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . $47,861,828 47,196,265
=========== ==========
Liabilities and Partners' Capital
---------------------------------
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 455,974 264,774
Accrued expenses:
Management fee payable to affiliate (note 3). . . . . . . . . . . . 33,779 41,136
Vacation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394,677 341,107
Bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249,920 130,768
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 803,655 1,015,154
Advance deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,362,327 836,465
----------- ----------
Total current liabilities . . . . . . . . . . . . . . . . . . . 3,300,332 2,629,404
Partners' capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,561,496 44,566,861
----------- ----------
Commitments and contingencies (note 6)
Total liabilities and partners' capital . . . . . . . . . . . . $47,861,828 47,196,265
=========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
VVH RESORTS LIMITED PARTNERSHIP
(SAN DIEGO PARADISE POINT RESORT)
Statements of Operations
For the period from January 1, 1998 through May 31, 1998 and the
years ended December 31, 1997, 1996 and 1995
<CAPTION>
For the period
from January 1,
1998 through
May 31, 1998
(unaudited) 1997 1996 1995
---------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Rooms . . . . . . . . . . . . . . . . $ 7,497,290 17,822,475 16,088,152 14,524,168
Food. . . . . . . . . . . . . . . . . 3,306,620 7,417,760 6,352,360 6,067,422
Beverage. . . . . . . . . . . . . . . 985,006 2,853,348 2,558,863 2,514,653
Gift shop . . . . . . . . . . . . . . 370,451 976,006 879,918 835,571
Other . . . . . . . . . . . . . . . . 639,466 1,461,039 1,198,222 1,108,181
----------- ----------- ----------- -----------
Total revenue . . . . . . . . 12,798,833 30,530,628 27,077,515 25,049,995
----------- ----------- -----------
Expenses:
Rooms . . . . . . . . . . . . . . . . 1,322,578 2,517,205 2,412,617 2,274,021
Food. . . . . . . . . . . . . . . . . 2,740,079 5,972,961 5,395,275 5,353,753
Beverage. . . . . . . . . . . . . . . 547,994 1,547,399 1,470,637 1,439,882
Gift shop . . . . . . . . . . . . . . 237,891 665,890 597,838 559,543
Other operating departments . . . . . 159,758 415,210 416,726 413,563
General and administrative. . . . . . 891,059 2,529,177 2,460,361 2,407,091
Marketing . . . . . . . . . . . . . . 567,453 2,230,799 2,081,607 2,069,788
Energy costs. . . . . . . . . . . . . 319,569 941,014 846,337 775,828
Property operations and maintenance . 901,253 1,941,045 1,882,824 2,032,855
Ground rent (note 6). . . . . . . . . 746,260 1,807,604 1,618,704 1,561,157
Management fee payable to affiliate
(note 3). . . . . . . . . . . . . . 255,870 610,627 541,532 500,874
Property taxes. . . . . . . . . . . . 271,950 606,219 575,800 505,866
Depreciation and amortization . . . . 0 2,345,423 2,277,041 2,447,346
Other . . . . . . . . . . . . . . . . 72,985 232,920 268,600 311,288
----------- ----------- ----------- -----------
Total expenses. . . . . . . . 9,034,699 24,363,493 22,845,899 22,652,855
----------- ----------- ----------- -----------
Net income. . . . . . . . . . $ 3,764,134 6,167,135 4,231,616 2,397,140
=========== =========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
VVH RESORTS LIMITED PARTNERSHIP
(SAN DIEGO PARADISE POINT RESORT)
Statements of Partners' Capital
For the period from January 1, 1998 through May 31, 1998 and the
years ended December 31, 1997, 1996 and 1995
<CAPTION>
San Diego San Diego
Princess Princess
Management Investments Total
----------- ----------- -----------
<S> <C> <C> <C>
Balances, December 31, 1994 . . . . . . . . . . . . . . $ 452,932 44,840,173 45,293,105
Distributions . . . . . . . . . . . . . . . . . . . . . (20,800) (2,059,200) (2,080,000)
Net income. . . . . . . . . . . . . . . . . . . . . . . 23,971 2,373,169 2,397,140
----------- ----------- -----------
Balances, December 31, 1995 . . . . . . . . . . . . . . 456,103 45,154,142 45,610,245
Distributions . . . . . . . . . . . . . . . . . . . . . (52,750) (5,222,250) (5,275,000)
Net income. . . . . . . . . . . . . . . . . . . . . . . 42,316 4,189,300 4,231,616
----------- ----------- -----------
Balances, December 31, 1996 . . . . . . . . . . . . . . 445,669 44,121,192 44,566,861
Contributions . . . . . . . . . . . . . . . . . . . . . 775 76,725 77,500
Distributions . . . . . . . . . . . . . . . . . . . . . (62,500) (6,187,500) (6,250,000)
Net income. . . . . . . . . . . . . . . . . . . . . . . 61,671 6,105,464 6,167,135
----------- ----------- -----------
Balances, December 31, 1997 . . . . . . . . . . . . . . 445,615 44,115,881 44,561,496
----------- ----------- -----------
Distributions (unaudited) . . . . . . . . . . . . . . . (26,200) (2,593,800) (2,620,000)
Net income (unaudited). . . . . . . . . . . . . . . . . 37,641 3,726,493 3,764,134
----------- ----------- -----------
Balances, May 31, 1998 (Unaudited). . . . . . . . . . . $ 457,056 45,248,574 45,705,630
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
VVH RESORTS LIMITED PARTNERSHIP
(SAN DIEGO PARADISE POINT RESORT)
Statements of Cash Flows
For the period from January 1, 1998 through May 31, 1998 and for the
years ended December 31, 1997, 1996 and 1995
<CAPTION>
For the period
from January 1,
1998 through
May 31, 1998
(Unaudited) 1997 1996 1995
--------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . $ 3,764,134 6,167,135 4,231,616 2,397,140
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization . . . . -- 2,345,423 2,277,041 2,447,346
Loss on disposal of equipment . . . . -- -- 22,739 101,190
Insurance paid by the partners on
behalf of the Partnership . . . . . -- 77,500 -- --
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable. . . . . . . (83,581) (426,111) 98,194 (349,531)
Inventories. . . . . . . . . . . 21,162 1,986 21,169 (40,023)
Prepaid expenses . . . . . . . . (11,641) (72,781) (56,067) 116,204
Increase (decrease) in
liabilities:
Accounts payable . . . . . . . . 304,099 191,200 (413,004) 73,965
Accrued expenses:
Management fee payable to
affiliate . . . . . . . . . . 27,954 (7,357) (29,568) 47,357
Vacation . . . . . . . . . . . -- 53,570 43,740 50,876
Bonuses. . . . . . . . . . . . -- 119,152 (2,604) 11,489
Other. . . . . . . . . . . . . (8,530) (211,499) 300,894 4,307
Advance deposits . . . . . . . . 141,151 525,862 255,696 227,666
----------- ----------- ----------- -----------
Net cash provided by
operating activities. . . . . 4,154,748 8,764,080 6,749,846 5,087,986
----------- ----------- ----------- -----------
<PAGE>
VVH RESORTS LIMITED PARTNERSHIP
(SAN DIEGO PARADISE POINT RESORT)
Statements of Cash Flows - Continued
For the period
from January 1,
1998 through
May 31, 1998
(Unaudited) 1997 1996 1995
-------------- ----------- ----------- -----------
Cash flows from investing activities:
Purchases of leasehold improvements
and equipment . . . . . . . . . . . . -- (2,489,675) (1,523,633) (2,896,500)
Proceeds from sale of equipment . . . . -- -- 8,000 8,874
----------- ----------- ----------- -----------
Net cash used in investing
activities. . . . . . . . . . -- (2,489,675) (1,515,633) (2,887,626)
----------- ----------- ----------- -----------
Cash flows from financing activities:
Payment of debt . . . . . . . . . . . . -- -- -- (77,000)
Partners' distributions . . . . . . . . (2,620,000) (6,250,000) (5,275,000) (2,080,000)
----------- ----------- ----------- -----------
Net cash used in financing
activities. . . . . . . . . . (2,620,000) (6,250,000) (5,275,000) (2,157,000)
----------- ----------- ----------- -----------
Net increase (decrease) in cash . . . . . 1,534,748 24,405 (40,787) 43,360
Cash at the beginning of the year . . . . 38,102 13,697 54,484 11,124
----------- ----------- ----------- -----------
Cash at the end of the year . . . . . . . 1,572,850 38,102 13,697 54,484
=========== =========== =========== ===========
Supplemental disclosure of cash flow
information -
Cash paid for interest. . . . . . . . . $ -- -- -- 5,180
=========== =========== =========== ===========
Supplemental disclosure of non-cash
investing and financing activities:
Expiration and write-off of equipment:
Reduction in assets . . . . . . . . . $ -- 196,366 1,656,188 4,013,942
Reduction in accumulated depreciation $ -- 196,366 1,625,449 3,903,878
Capital contribution resulting from
insurance paid by the partners on
behalf of the Partnership. . . . . . $ -- 77,500 -- --
=========== =========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
VVH RESORTS LIMITED PARTNERSHIP
(SAN DIEGO PARADISE POINT RESORT)
Notes to Financial Statements
December 31, 1997 and 1996
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
AND PRACTICES
(a) ORGANIZATION
VVH Resorts Limited Partnership, a Delaware limited partnership
(the Partnership) operates the San Diego Paradise Point Resort (formerly
the San Diego Princess Resort), a 462-room hotel located in San Diego,
California. The hotel was owned by the Partnership, through May 31, 1998,
when it was sold to an affiliate of LaSalle Hotel Properties.
Profits, losses and distributions are allocated 1% to the
general partner (San Diego Princess Management) and 99% to the limited
partner (San Diego Princess Investment).
(b) INVENTORIES
Inventories, consisting primarily of food and beverage, are
stated at cost, which approximates market. Cost is generally determined
using the first-in, first-out method.
(c) LEASEHOLD IMPROVEMENTS AND EQUIPMENT
Leasehold improvements and equipment are stated at cost.
Leasehold improvements are amortized using the straight-line method over
the estimated useful live of the asset (30 years). Furniture and fixtures
are depreciated using the straight-line method over the estimated useful
lives of the assets, which range from five to seven years.
(d) LEASEHOLD INTERESTS
Leasehold interests represent the value assigned to the resort
operating lease at the time it was acquired by the Partnership (Note 6).
The leasehold interest is being amortized on a straight-line basis over the
remaining lease term.
(e) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE
DISPOSED OF
The Partnership adopted the provisions of Statement of
Accounting Financial Standards (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets to Be Disposed Of", on January 1, 1996.
This statement requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held is measured by a
comparison of the carrying amount of an asset to undiscounted future net
cash flows (undiscounted and without interest) expected to be generated by
the asset. If such assets are considered to be impaired, the impairment to
be recognized is measured by the amount by which the carrying amounts of
the assets exceed the fair values of the assets. Assets to be disposed of
are reported at the lower of the carrying amount or fair value less costs
to sell. Adoption of this statement did not have a material impact on the
Partnership's financial position, results of operations, or liquidity.
<PAGE>
VVH RESORTS LIMITED PARTNERSHIP
(SAN DIEGO PARADISE POINT RESORT)
Notes to Financial Statements - Continued
December 31, 1997 and 1996
(f) PROPERTY HELD FOR SALE
Depreciation and amortization is suspended during the period the
property is held for sale.
(g) MARKETING
Marketing costs are expensed as incurred.
(h) INCOME TAXES
Taxable income or loss of the Partnership is reported by, and is
the responsibility of, the respective partners. Accordingly, the
Partnership has no provision for income taxes.
(i) USE OF ESTIMATES
Management of the Partnership has made a number of estimates and
assumptions relating to the reporting of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period to prepare those financial statements in
conformity with generally accepted accounting principles. Actual results
could differ from those estimates.
(j) BUSINESS RISK
Any substantial change in economic conditions or any significant
price fluctuations related to the travel and tourism industry could affect
discretionary consumer spending and have a material impact on the
Partnership's business. In addition, the Partnership is subject to
competition from other entities engaged in the business of resort
development and operation, including interval ownership, condominiums,
hotels and motels.
(2) LEASEHOLD IMPROVEMENTS AND EQUIPMENT
Leasehold improvements and equipment at December 31, 1997 and 1996
consist of the following:
1997 1996
----------- -----------
Leasehold improvements. . . . . . . $31,339,906 31,010,813
Furniture and fixtures. . . . . . . 5,341,349 5,289,464
Construction in progress. . . . . . 2,096,849 184,518
----------- -----------
38,778,104 36,484,795
Less accumulated depreciation
and amortization. . . . . . . . . (10,450,665) (8,683,047)
----------- -----------
$28,327,439 27,801,748
=========== ===========
<PAGE>
VVH RESORTS LIMITED PARTNERSHIP
(SAN DIEGO PARADISE POINT RESORT)
Notes to Financial Statements - Continued
December 31, 1997 and 1996
(3) RELATED PARTY TRANSACTIONS
The Partnership pays an affiliate of the general partner a management
fee of 2% of gross receipts, as defined, to manage and operate the hotel.
The initial term of the management agreement expires in 1998.
(4) FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107, "Disclosures About Fair Value of Financial Instruments",
requires that fair values be disclosed for the Partnership's financial
instruments. The carrying amount of cash, accounts receivable, accounts
payable, and accrued expenses are reasonable estimates of their fair values
due to the short-term nature of those instruments.
(5) EMPLOYEE BENEFITS
(a) PROFIT SHARING PLAN
In 1996, the Partnership began sponsorship of a 401(k) Profit
Sharing Plan (the "401(k) Plan") that is available to substantially all
employees. Employer contributions to the 401(k) Plan are determined at
management's discretion. Contributions to the 401(k) Plan were $39,285 and
$25,973 for the years ended December 31, 1997 and 1996, respectively.
(b) PENSION PLAN
The Partnership sponsored a defined benefit Pension Plan (the
"Plan") covering substantially all employees. On December 28, 1995, the
trustees voted to "freeze" the Plan effective January 11, 1996. Employees
eligible for benefits under the Plan continued to vest and receive benefits
in accordance with Plan guidelines; however, additional benefits were not
earned for service subsequent to January 11, 1996 and no new employees were
covered by the Plan. The Plan was terminated and liquidated during 1997.
Contributions to the Plan were $30,000, $100,000 and $109,676 for the years
ended December 31, 1997, 1996 and 1995, respectively.
(6) COMMITMENTS AND CONTINGENCIES
(a) GROUND LEASE
The Partnership is the lessee under a long-term ground lease on
which the hotel is located. The lease, which had 32 years remaining on the
original term when the Partnership acquired the hotel, was renegotiated
effective January 1, 1995. The renegotiated lease expires December 31,
2044 and requires contingent rents based on a percentage of gross income,
as defined. The annual minimum rent for the first three years is
$1,000,000. In each succeeding three-year period, minimum monthly rent is
adjusted to 80% of annual average of actual rents paid or accrued during
the preceding three years.
<PAGE>
VVH RESORTS LIMITED PARTNERSHIP
(SAN DIEGO PARADISE POINT RESORT)
Notes to Financial Statements - Concluded
December 31, 1997 and 1996
(b) LITIGATION
The Partnership is, from time to time, involved in various
claims and legal action arising in the ordinary course of business.
Although the final outcome of these legal matters cannot be determined, it
is management's opinion, based in part on advice of legal counsel, that the
final resolution of these matters will not have a material adverse effect
on the Partnership's financial position, results of operations, or
liquidity.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
LASALLE HOTEL PROPERTIES
Date: August 14, 1998 By: /S/ JON E. BORTZ
Jon E. Bortz
President and
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------------- -----------
Exhibit 10.1* Purchase and Sale Agreement with Joint Escrow
Instructions, dated as of June 1, 1998, by and between VVH Resorts, Ltd.
and LHO Mission Bay Hotel, L.P.
Exhibit 10.2* Subscription Agreement (with registration rights), dated
as of May 28, 1998, by WestGroup San Diego Associates, Ltd.
Exhibit 10.3* Agreement of Limited Partnership, dated as of June 1,
1998, of LHO Mission Bay Hotel, L.P.
Exhibit 10.4* Lease Agreement, dated as of June 1, 1998, by and between
LHO Mission Bay Hotel, L.P. and WestGroup San Diego Associates, Ltd.
* Previously filed.
