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 24, 2000
LASALLE HOTEL PROPERTIES
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(Exact name of registrant as specified in its charter)
Maryland 1-14045 36-4219376
- ------------------------ ------------------------ ---------------
(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 24, 2000, LaSalle Hotel Properties issued a press release
announcing its results for the quarter and twelve months ended December 31,
1999. A copy of the press release is filed as an exhibit to this report
and is incorporated by reference herein.
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.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The following exhibit is included with this Report:
Exhibit 99 Press release dated January 24, 2000 issued by LaSalle
Hotel Properties.
<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
------------------------------
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
- ------- -----------
99 Press release dated January 24, 2000
EXHIBIT 99
- ----------
FOR IMMEDIATE RELEASE
Contact: Eileen M. Sanaghan--Chicago 312 228 2774
LA SALLE HOTEL PROPERTIES REPORTS 12 PERCENT INCREASE
IN 1999 FUNDS FROM OPERATIONS
RevPAR for Comparable Hotels Increases 7.0 Percent
WASHINGTON, D.C., JANUARY 24, 2000 -- LaSalle Hotel Properties
(NYSE: LHO) today reported an increase in funds from operations (FFO) of 12
percent to $44.1 million for the year ended December 31, 1999 from $39.4
million for the prior year. FFO for the year ended December 31, 1999 rose
to $2.39 per share/unit (basic and diluted), representing an increase of
$0.24 or 11 percent, as compared to the combined pro forma/actual year
ended December 31, 1998 FFO per share/unit (basic and diluted) of $2.15.
For the year 1999 versus 1998, room revenue per available room
(RevPAR) on a comparable basis increased 7.0 percent to $106.02. The
average daily rate (ADR) of $142.19 for comparable hotels represents a 7.1
percent increase over the prior year while comparable hotel average
occupancy was flat. For the total portfolio, RevPAR in 1999 increased 5.0
percent to $97.91.
In 1999, lease revenues were $76.8 million, a 22.9 percent increase
over the prior year. Net income for the year ended December 31, 1999 was
$14.0 million, or $0.91 per share (basic and diluted), compared to combined
pro forma/actual net income of $17.4 million, or $1.15 per share (basic and
diluted), for the year ended December 31, 1998.
"The net result of the continued successful execution of our strategy
is that we were able to achieve very significant increases in both RevPAR
and FFO in 1999," said Jon Bortz, President and CEO of LaSalle Hotel
Properties. "In 1999, LaSalle Hotel Properties was the number one
performing REIT based on total returns to shareholders, according to the
Wilshire REIT Index and Prudential Securities. "We attribute the company's
superior performance to our ownership of high quality hotels located in
strong markets with high barriers to entry, our continuing refurbishment
and repositioning programs, our hands-on approach to asset management and
our balance sheet strategy," continued Mr. Bortz.
-- more --
<PAGE>
LHO REPORTS 12 PERCENT INCREASE IN ANNUAL FFO
In 1999, LaSalle Hotel Properties acquired the Hotel Viking, an
upscale hotel located in the resort town of Newport, Rhode Island.
Additionally, the Company continued its three-year Property Reinvestment
Program which includes the renovation, upgrade and repositioning of the
Marriott Seaview Resort, San Diego Paradise Point Resort and Hotel Viking,
as well as the renovation and upgrade of the Radisson Convention Hotel in
Bloomington, Minnesota and the Radisson Hotel Tampa. In August 1999, the
Company extended the maturity of a portion of its debt through the
arrangement of a $46.5 million ten-year fixed-rate first mortgage on two of
its properties, utilizing the proceeds to repay a portion of its debt
outstanding on its line of credit. The Company also increased its
quarterly dividend during the year.
"Last year, we reinvested approximately $32 million, or $7,500 per
room, into our hotels in order to provide customers with a superior lodging
experience. Ultimately, the repositioning of several of our hotels to
higher quality levels provided the opportunity for these assets to generate
higher room rates," highlighted Mr. Bortz. "In 2000, we have identified
opportunities to invest an additional $28 to $30 million in our existing
hotels, including the approximately $9 million expansion and repositioning
of the Hotel Viking which commenced in November 1999. On a per room basis,
this rate of investment is well above the industry average and should allow
us to continue to grow our ADR at a healthy pace above inflation."
"We make it a practice to constantly evaluate each of our hotels to
identify opportunities to maximize revenues, minimize expenses and add
value through major capital activities such as expansions, renovations or
major repositionings," stated Mr. Bortz. "As part of this strategic
review, we also evaluate the strategic fit of each hotel, analyze whether a
hotel continues to meet our long-term investment strategies and determine
the most opportune time to sell an asset to maximize the long-term value of
our Company. If we conclude that a particular property no longer fits with
our overall strategy, and determine that we can deploy our capital more
effectively by selling an existing asset and investing in a new acquisition
or renovating an existing asset with the proceeds, we will do so."
On January 14, 2000, LaSalle Hotel Properties paid its fourth quarter
dividend of $0.38 per share. For 1999, the Company paid $1.515 in
dividends per share, of which 91.1 percent represented ordinary income and
8.9 percent represented return of capital for tax purposes. On an
annualized basis, the dividend yield was 12.7 percent based on the stock's
closing price on January 24, 2000. During 1999, the company raised its
dividend per share by $0.02 on an annualized basis.
FOURTH QUARTER RESULTS
- ----------------------
For the fourth quarter 1999, LaSalle Hotel Properties reported an
increase in FFO of 4.4 percent to $8.7 million versus $8.3 million for the
prior year period. On a per share/unit (basic and diluted) basis, fourth
quarter 1999 FFO was $0.47 versus fourth quarter 1998 FFO of $0.45.
-- more --
<PAGE>
LHO REPORTS 12 PERCENT INCREASE IN ANNUAL FFO
RevPAR on a comparable hotel basis increased 5.8 percent to $95.25
for the quarter ended December 31, 1999 versus $90.02 for the same period
in 1998. The ADR of $143.66 for comparable hotels represents a 9.3 percent
increase over the prior year period, while comparable hotel average
occupancy declined 3.2 percent to 66.3 percent. For the total portfolio,
RevPAR in the fourth quarter was $91.33, a 5.6 percent increase over the
fourth quarter 1998.
"In 2000, assuming the economy continues to grow moderately, we are
projecting RevPAR growth of three to four percent for our hotel portfolio,"
said Mr. Bortz. "Our properties, along with the upscale and luxury
segments of the hotel industry, continue to achieve high occupancy rates,
which should allow us to continue to increase room rates above inflation in
2000."
Participating lease revenues for the fourth quarter 1999 were $17.2
million, an increase of 12.9 percent over the fourth quarter 1998. Net
income for the fourth quarter 1999 was $0.05 million, or $0.00 per share
(basic and diluted), down from net income of $2.1 million, or $0.14 per
share (basic and diluted), for the fourth quarter 1998. At the end of the
fourth quarter 1999, LaSalle Hotel Properties had total outstanding debt of
approximately $251 million, of which $164.9 million was outstanding on the
company's $235 million line of credit. Consistent with its philosophy of
divesting assets that do not fit into its long-term strategy, the Company
put the Holiday Inn Visalia on the market for sale during the fourth
quarter 1999. Based on initial pricing expectations, the book value of the
asset was reduced by $2.0 million.
Since the Company had no significant operations until after the
completion of its initial public offering on April 29, 1998, combined pro
forma/actual operating results for 1998 are presented as if the Company had
completed its initial public offering, acquired its interest in its ten
initial upscale and luxury full service hotels, and leased these hotels
under participating leases as of January 1, 1998. The combined pro forma
results are based upon available information and certain assumptions that
management of the Company believes are reasonable. For the year ended
December 31, 1998, operating results on a combined basis are presented as
six months pro forma for the first two quarters and six months actual
results for the last two quarters.
The combined pro forma/actual results are not necessarily indicative
of what the actual results of operations would have been for the year ended
December 31, 1998 or the six month period ended June 30, 1998, had the
Company completed the initial public offering and acquired the initial ten
upscale and luxury hotels on the date indicated, nor does it purport to
represent the future results of operations of the Company. For the two
hotels acquired during the second quarter of 1998, their operating results
are being presented in the pro forma results as of the date of the
completion of each respective acquisition.
-- more --
<PAGE>
LHO REPORTS 12 PERCENT INCREASE IN ANNUAL FFO
LaSalle Hotel Properties is a leading multi-tenant, multi-operator
real estate investment trust which owns or has interests in 13 upscale and
luxury full-service hotels, totaling approximately 4,300 guest rooms in 13
markets in ten 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.
The REIT 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 the Company 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 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" and
"Quantitative and Qualitative Disclosure about Market Risk" and elsewhere
in the Company's quarterly report 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 with the
Securities and Exchange Commission. Statements speak only as of the date
of this release. The Company expressly disclaims any obligation or
undertaking to update or revise any forward-looking statements contained
herein to reflect any change in Company expectations or results, or any
change in events.
# # #
ADDITIONAL CONTACTS:
- -------------------
Hans Weger -- Chief Financial Officer, LaSalle Hotel Properties --
202/222-2600
Raymond Martz -- Director of Finance/Investor Relations,
LaSalle Hotel Properties -- 202/222-2600
For additional information, please visit our web site
at www.lasallehotels.com
<PAGE>
LA SALLE HOTEL PROPERTIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)
For the three For the three
months ended months ended
December 31, December 31,
1999 1998
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REVENUES:
Participating lease revenue . . . . $ 17,211 $ 15,240
Interest income . . . . . . . . . . 272 219
Other income. . . . . . . . . . . . 39 (13)
---------- ----------
Total Revenues . . . . . . . . . 17,522 15,446
---------- ----------
EXPENSES:
Depreciation and other
amortization . . . . . . . . . . . 6,816 5,765
Real estate taxes, personal
property taxes and insurance . . . 2,087 1,879
Ground rent . . . . . . . . . . . . 806 625
General and administrative. . . . . 393 152
Interest. . . . . . . . . . . . . . 4,623 3,476
Amortization of deferred financing
costs. . . . . . . . . . . . . . . 259 220
Advisory fees . . . . . . . . . . . 636 758
Other expense . . . . . . . . . . . 17 --
Minority interest . . . . . . . . . (163) 446
Writedown of property held
for sale . . . . . . . . . . . . . 2,000 --
---------- ----------
Total expenses, minority
interest and writedown . . . . 17,474 13,321
---------- ----------
Net income . . . . . . . . . . . . . $ 48 $ 2,125
========== ==========
SHARE DATA:
Net income per weighted average
common share outstanding -
basic and diluted . . . . . . . . . $ 0.00 $ 0.14
Weighted average number of
common shares outstanding -
basic and diluted . . . . . . . . . 15,938,385 15,224,580
FUNDS FROM OPERATIONS (FFO):
Net income. . . . . . . . . . . . . $ 48 $ 2,125
Depreciation. . . . . . . . . . . . 6,814 5,765
Minority interest . . . . . . . . . (163) 446
Writedown of property held
for sale . . . . . . . . . . . . . 2,000 --
---------- ----------
FFO. . . . . . . . . . . . . . . $ 8,699 $ 8,336
========== ==========
FFO per common share and unit -
basic and diluted . . . . . . . . . $ 0.47 $ 0.45
Weighted average number of common
shares and units outstanding -
basic and diluted . . . . . . . . . 18,422,286 18,406,303
<PAGE>
LA SALLE HOTEL PROPERTIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)
For the combined
For the pro forma/actual
year ended year ended
December 31, December 31,
1999 1998
------------- ----------------
REVENUES:
Participating lease revenue . . . . $ 76,843 $ 62,498
Interest income . . . . . . . . . . 988 674
Other income. . . . . . . . . . . . 123 (85)
---------- ----------
Total Revenues . . . . . . . . . 77,954 63,087
---------- ----------
EXPENSES:
Depreciation and other
amortization . . . . . . . . . . . 25,378 18,362
Real estate taxes, personal
property taxes and insurance . . . 8,205 7,208
Ground rent . . . . . . . . . . . . 3,351 2,019
General and administrative. . . . . 1,342 691
Interest. . . . . . . . . . . . . . 16,181 10,022
Amortization of deferred financing
costs. . . . . . . . . . . . . . . 992 711
Advisory fees . . . . . . . . . . . 3,670 3,050
Other expense . . . . . . . . . . . 140 --
Minority interest . . . . . . . . . 2,706 3,653
Writedown of property held
for sale . . . . . . . . . . . . . 2,000 --
---------- ----------
Total expenses, minority
interest and writedown . . . . 63,965 45,716
---------- ----------
Net income . . . . . . . . . . . . . $ 13,989 $ 17,371
========== ==========
SHARE DATA:
Net income per weighted average
common share outstanding -
basic and diluted . . . . . . . . . $ 0.91 $ 1.15
Weighted average number of
common shares outstanding -
basic and diluted . . . . . . . . . 15,432,667 15,178,056
FUNDS FROM OPERATIONS (FFO):
Net income. . . . . . . . . . . . . $ 13,989 $ 17,371
Depreciation. . . . . . . . . . . . 25,370 18,362
Minority interest . . . . . . . . . 2,706 3,653
Writedown of property held
for sale . . . . . . . . . . . . . 2,000 --
---------- ----------
FFO. . . . . . . . . . . . . . . $ 44,065 $ 39,386
========== ==========
FFO per common share and unit -
basic and diluted . . . . . . . . . $ 2.39 $ 2.15
Weighted average number of common
shares and units outstanding -
basic and diluted . . . . . . . . . 18,419,694 18,359,779
<PAGE>
LA SALLE HOTEL PROPERTIES
STATISTICAL DATA FOR THE HOTELS
For the three For the twelve
months ended months ended
December 31, December 31,
----------------- -----------------
1999 1998 1999 1998
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COMPARABLE HOTELS (1)
Occupancy. . . . . . . . . . . . 66.3% 68.5% 74.6% 74.6%
Increase . . . . . . . . . . . (3.2%) 0.0%
ADR. . . . . . . . . . . . . . . $143.66 $131.39 $142.19 $132.83
Increase . . . . . . . . . . . 9.3% 7.1%
REVPAR . . . . . . . . . . . . . $95.25 $90.02 $106.02 $99.09
Increase . . . . . . . . . . . 5.8% 7.0%
NON-COMPARABLE HOTELS (1)
Occupancy. . . . . . . . . . . . 62.1% 62.3% 62.7% 66.0%
Increase . . . . . . . . . . . (0.3%) (5.0%)
ADR. . . . . . . . . . . . . . . $125.98 $120.01 $124.10 $119.33
Increase . . . . . . . . . . . 5.0% 4.0%
REVPAR . . . . . . . . . . . . . $78.29 $74.81 $77.83 $78.77
Increase . . . . . . . . . . . 4.7% (1.2%)
TOTAL PORTFOLIO
Occupancy. . . . . . . . . . . . 65.3% 67.1% 71.2% 72.1%
Increase . . . . . . . . . . . (2.6%) (1.3%)
ADR. . . . . . . . . . . . . . . $139.78 $128.93 $137.60 $129.27
Increase . . . . . . . . . . . 8.4% 6.4%
REVPAR . . . . . . . . . . . . . $91.33 $86.48 $97.91 $93.24
Increase . . . . . . . . . . . 5.6% 5.0%
(1) Non-Comparable hotels for:
Three months ended December 31 include Le Montrose, Radisson
Tampa, Hotel Viking and San Diego Paradise Point Resort.
Twelve months ended December 31 include Marriott Seaview, San
Diego Paradise Point Resort, and Radisson Convention Hotel
in Quarters 1 and 2, and Le Meridien Dallas, Radisson Tampa,
and Radisson Convention Hotel in Quarter 3, Le Montrose,
Radisson Tampa, Hotel Viking and San Diego Paradise Point
Resort in Quarter 4.
Comparable Hotels include all Hotels excluding those in Non-
Comparable hotels.
