UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 25, 2000
LASALLE HOTEL PROPERTIES
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(Exact name of registrant as specified in its charter)
Maryland 1-14045 36-4219376
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(State or other juris- (Commission File Number) (IRS Employer
diction of incorporation Identification
or organization) No.)
1401 Eye Street, NW, Suite 900, Washington, D.C. 20005
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 202/222-2600
Not Applicable
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
On January 25, 2000, LaSalle Hotel Properties issued a press release
announcing the acquisition of the Chicago Marriott Downtown Hotel (the
"Chicago Marriott") in a joint venture with The Carlyle Group. A copy of
the press release is filed as an exhibit to this report and is incorporated
by reference herein.
The purchase price for the Chicago Marriott was $175 million. Based
upon total acquisition costs, which includes closing costs, the hotel was
purchased at an EBITDA yield of approximately 12% based on 1999's estimated
results, or an unleveraged cash on cash yield after initial reserves of
approximately 10%. The first mortgage debt of $120 million was provided by
a group of lenders. The Carlyle Group contributed approximately 90.1
percent of the equity and LaSalle Hotel Properties contributed
approximately 9.9 percent. As part of the transaction, 16,667 units in
LaSalle Hotel Operating Partnership, L.P. priced at $18.00 per unit were
issued to an affiliate of The John Buck Company. LaSalle Hotel Properties
will receive an annual preferred return in addition to its pro rata share
of annual cash flow. LaSalle Hotel Properties will also have the
opportunity to earn an incentive participation in net sale proceeds based
upon the achievement of certain overall investment returns, in addition to
its pro rata share of net sale or refinancing proceeds.
Based on the Company's current expectations, it is anticipated that
the acquisition of the Chicago Marriott will be approximately 2 to 2-1/2
percent accretive to the Company's earnings for 2000. This is based upon a
projected leveraged cash on cash yield (after capital reserves) to the
Company from the joint venture of between 18 and 20 percent.
LaSalle Hotel Properties will host a conference call with investors on
Tuesday, January 25 at 4:00 p.m., Eastern Time. To participate in the
call, dial 913-981-5529 five minutes before the call begins (3:55 p.m.
Eastern). Inform the operator that you are calling in for LaSalle Hotel
Properties' year end and fourth quarter 1999 earnings conference call.
Additionally, replays of the conference call will be available from
7:00 p.m., Eastern Time, on Tuesday, January 25 until noon, Eastern Time,
on Thursday, January 27. To access the replay, please dial 719-457-0820
and state your name, company affiliation and passcode 876594.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995: Certain statements in this filing and elsewhere (such as in
other filings by the Company with the Securities and Exchange Commission,
press releases, presentations and communications by the Company or its
management and written and oral statements) constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance, achievements, plans and objectives of the Company to be
materially different from any future results, performance, achievements,
plans and objectives expressed or implied by such forward-looking
statements. Such factors are discussed under "Business", "Management's
Discussion and Analysis of Financial Condition and Results of Operations",
"Quantitative and Qualitative Disclosure about Market Risk" and elsewhere
in the Company's annual report on Form 10-K for the year ended December 31,
1998, under "Management's Discussion and Analysis of Financial Condition
and Results of Operations", "Quantitative and Qualitative Disclosure about
Market Risk" and elsewhere in the Company's quarterly reports on Form 10-Q
for the quarters ended March 31, 1999, June 30, 1999 and September 30,
1999, under "Certain Relationships and Related Transactions" and elsewhere
in the Company's proxy statement with respect to the annual meeting of
shareholders held on May 19, 1999, under "Risk Factors" and elsewhere in
the Company's Registration Statement (No. 333-77371), and in other reports
filed by the Company with the Securities and Exchange Commission. The
Company expressly disclaims any obligation or undertaking to update or
revise any forward-looking statements to reflect any change in events or
circumstances or in the Company's expectations.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The following exhibit is included with this Report:
Exhibit 99 Press release dated January 25, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
LASALLE HOTEL PROPERTIES
Dated: January 25, 2000 BY: /s/ HANS WEGER
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Hans Weger
Executive Vice President,
Treasurer and Chief
Financial Officer
(Authorized Officer and
Principal Financial and
Accounting Officer)
<PAGE>
EXHIBIT INDEX
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Exhibit
Number Description
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99 Press release dated January 25, 2000.
EXHIBIT 99
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Contact: Eileen M. Sanaghan--Chicago 312 228 2774
THE CARLYLE GROUP AND LASALLE HOTEL PROPERTIES ACQUIRE
CHICAGO MARRIOTT DOWNTOWN
WASHINGTON, D.C., JANUARY 25, 2000 -- The Carlyle Group and LaSalle
Hotel Properties (NYSE: LHO) today announced the acquisition of the 1,176-
room Chicago Marriott Downtown in Chicago. Marriott International, Inc.
will continue to manage and operate the property.
The Chicago Marriott Downtown is a full-service, upscale convention
hotel located on North Michigan Avenue, in the heart of downtown Chicago's
world-famous "Magnificent Mile." The property has over 60,000 square feet
of meeting space, five food and beverage outlets, a health club and sports
center, a business center and a gift shop.
A $40 million renovation was completed at the property in May 1999
and included a complete hard and soft goods guestroom renovation, guest
bath improvements, lobby redesign, and public area and meeting room
renovation. Additionally, the hotel's North Michigan Avenue facade was
completely re-faced and new entryways were installed on Michigan Avenue and
Rush Street.
"We were able to acquire a great hotel well below its replacement
cost in one of the best locations in the city of Chicago. We believe
strongly in the long-term prospects of Chicago as we have acquired over
$500 million of real estate in the city over the past 12 months," stated
Rob Stuckey, Managing Director of The Carlyle Group. "LaSalle Hotel
Properties has a proven track record in successful hotel investments and
our partnership with them furthers our confidence in this acquisition."
Located at the intersection of North Michigan Avenue and Ohio Street
with Chicago's preeminent business, residential, entertainment and retail
addresses directly outside its door, the Chicago Marriott Downtown has
superb visibility and allows guests convenient access to a variety of
attractions. A world-renowned shopping destination, the "Magnificent Mile"
is home to such retailers as Neiman Marcus, Saks Fifth Avenue, Marshall
Fields, and Niketown.
-- more --
<PAGE>
THE CARLYLE GROUP AND LASALLE HOTEL PROPERTIES
ACQUIRE CHICAGO MARRIOTT DOWNTOWN
"The Chicago Marriott Downtown is an extraordinary asset to add to
our diversified portfolio of upscale and luxury hotels. The newly-
renovated convention hotel will reap the benefits of the completed North
Bridge development project. We envision this area becoming the Times
Square of Chicago," highlighted Jon Bortz, President and Chief Executive
Officer of LaSalle Hotel Properties. "Additionally, we are excited about
renewing our long-term and successful relationship with The Carlyle Group,
a well respected and distinguished global investment firm."
The Chicago Marriott Downtown is the cornerstone of the multi-million
dollar North Bridge project being developed by The John Buck Company and
Morgan Stanley Dean Witter. The mixed-use development project encompasses
eight city blocks surrounding the hotel. When completed in 2000, the
development will include approximately 900,000 square feet of Class A
retail and entertainment space, featuring upscale retailers such as
Nordstrom, Gucci, Disney Quest, ESPN Zone and Virgin Records, 800,000
square feet of office space, 457 luxury apartment units, and 2,500 movie
theater seats.
According to Smith Travel Research, Chicago's hotel market achieved
RevPAR growth of 7.1 percent in 1998, surpassed only by San Diego, New
York, Los Angeles and San Francisco. With the recent expansion of
McCormick Place, the nation's largest convention center, tourism and
conventions in the city are expected to continue to increase over the next
several years.
"Clearly, Chicago is a major metropolitan market where we want to
invest. This acquisition supports our strategy of acquiring upscale and
luxury urban, resort, and convention hotels in high barrier to entry
markets," added Mr. Bortz.
The North Bridge project has already transformed the neighborhood.
The newly added first-class retailing and urban entertainment has
significantly increased pedestrian traffic to North Bridge, which enhances
The Chicago Marriott's appeal to group and corporate clientele and weekend
leisure travelers. Moreover, due to the recently completed renovation, the
hotel will be a choice location for Chicago convention attendees, who are
expected to attend conventions in record numbers during 2000.
The Chicago Marriott Downtown represents the first joint venture
between The Carlyle Group and LaSalle Hotel Properties. Prior to LaSalle
Hotel Properties' initial public offering in April 1998, The Carlyle Group
and Jones Lang LaSalle, the advisor of LaSalle Hotel Properties, completed
numerous successful joint venture investments including the 891-room
Orlando Peabody, a luxury convention hotel adjacent to the Orlando
Convention Center.
-- more --
<PAGE>
THE CARLYLE GROUP AND LASALLE HOTEL PROPERTIES
ACQUIRE CHICAGO MARRIOTT DOWNTOWN
"We entered into a joint venture with The Carlyle Group because of
our shared commitment to acquiring high quality assets and our commitment
to creating value for our investors. We were able to acquire this unique
asset at an attractive price by utilizing the extensive hotel experience
and resources of LaSalle Hotel Properties combined with the investment and
hotel expertise of The Carlyle Group, a well respected investment firm,"
continued Jon Bortz.
The acquisition builds on LaSalle Hotel Properties' relationship with
Marriott International, Inc., one of the world's leading hotel operating
companies. The Chicago Marriott Downtown is the fourth hotel owned by
LaSalle Hotel Properties that is managed by Marriott International, Inc.
Marriott International, Inc.'s management experience, extensive
distribution system and large customer following should enable the Chicago
Marriott Downtown to continue its strong current performance.
The upscale convention hotel is LaSalle Hotel Properties' fourth
hotel acquisition since going public in April 1998. Other acquired hotels
include the San Diego Paradise Point Resort, a 462-room upscale resort in
San Diego, the Harborside Hyatt, a 270-room luxury urban hotel in Boston,
and the Hotel Viking, a 192-room upscale resort in Newport, Rhode Island.
The Carlyle Group is a private global investment firm based in
Washington, D.C. Founded in May 1987, Carlyle originates, structures and
acts as lead equity investor in real estate transactions, corporate
management-led buyouts and equity private placements. In addition to
directing the acquisition of over $3.66 billion of real estate assets
throughout the United States, Carlyle has sponsored more than $12 billion
of mergers, acquisitions and other corporate investments. The firm
currently has $721 million of equity capital under management dedicated to
real estate investment opportunities, and more than $4.8 billion of equity
capital under management by separate teams dedicated to management-led
buyouts and strategic minority investments, venture capital, high yield,
and Asian and European investment opportunities.
LaSalle Hotel Properties is a leading multi-tenant, multi-operator
real estate investment trust which owns or has interests in 14 upscale and
luxury full-service hotels, totaling approximately 5,500 guest rooms in 14
markets in eleven states. LaSalle Hotel Properties is focused on investing
in upscale and luxury full-service hotels located primarily in major
business and urban, resort and convention markets. The company seeks to
grow through strategic relationships with premier internationally
recognized hotel operating companies including Le Meridien Hotels &
Resorts, Marriott International, Inc., Radisson Hotels International, Inc.,
Durbin Companies, Outrigger Lodging Services, Noble House Hotels & Resorts
and Hyatt Hotels Corporation.
-- more --
<PAGE>
THE CARLYLE GROUP AND LASALLE HOTEL PROPERTIES
ACQUIRE CHICAGO MARRIOTT DOWNTOWN
LaSalle Hotel Properties serves as the exclusive vehicle for Jones
Lang LaSalle's hotel investment activities in the United States. Jones
Lang LaSalle (NYSE: JLL) is the world's leading real estate services and
investment management firm with more than $20.8 billion of assets under
management and operating across more than 100 key markets in approximately
35 countries on five continents.
Statements in this press release regarding, among other things,
expectations, future financial results and performance, achievements, plans
and objectives may be considered forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
statements involve known and unknown risks, uncertainties and other factors
which may cause actual results, performance, achievements, plans and
objectives of LaSalle Hotel Properties to be materially different from
those expressed or implied by such forward-looking statements. Factors
that could cause actual results to differ materially include those
discussed under "Business", "Management's Discussion and Analysis of
Financial Condition and Results of Operations", "Quantitative and
Qualitative Disclosure About Market Risk" and elsewhere LaSalle Hotel
Properties' annual report on Form 10-K for the year ended December 31,
1998, under "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Quantitative and Qualitative Disclosure
about Market Risk" and elsewhere in LaSalle Hotel Properties' quarterly
reports on Form 10-Q for the quarters ended March 31, 1999, June 30, 1999
and September 30, 1999, under "Certain Relationships and Related
Transactions" and elsewhere in LaSalle Hotel Properties' proxy statement
with respect to the annual meeting of shareholders held on May 19, 1999,
under "Risk Factors" and elsewhere LaSalle Hotel Properties' Registration
Statement (No. 333-77371) and in other reports filed with the Securities
and Exchange Commission. Statements speak only as of the date of this
release. LaSalle Hotel Properties expressly disclaims any obligation or
undertaking to update or revise any forward-looking statements contained
herein to reflect any change in LaSalle Hotel Properties' expectations or
results, or any change in events.
ADDITIONAL CONTACTS:
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Hans Weger, Chief Financial Officer, LaSalle Hotel Properties --
202/222-2600
Raymond Martz, Director of Finance/Investor Relations,
LaSalle Hotel Properties -- 202/222-2600
website: www.lasallehotels.com
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