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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) March 29, 1999
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CRESTLINE CAPITAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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<S> <C> <C>
Maryland 1-14635 52-2151967
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification Number)
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10400 Fernwood Road, Bethesda, Maryland 20817
(Address of Principle Executive Offices) (Zip Code)
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Registrant's Telephone Number, Including Area Code (240) 694-2000
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FORM 8-K
Item 2. Acquisition or Disposition of Assets
Crestline Capital Corporation (the "Company") acquired a 74% limited
partnership interest in the Marriott Residence Inn USA Limited Partnership (the
"Partnership") on March 29, 1999 from a private Japanese investor for
approximately $34.4 million. The total consideration for the acquisition is $89
million, including the consolidation of $54.6 million in debt. The purchase was
funded from available cash on hand. The Partnership owns eleven Residence Inn
limited-service hotels managed by Marriott International, Inc. Host Marriott
Corporation owns a 5% general partner interest in the Partnership.
Item 7. Financial Statements and Exhibits
(a) Financial statements of acquired business.
It is impracticable for the Company to provide historical
financial statements for the Partnership at the time of this
filing. The Company will file such financial statements by
amendment no later than June 12, 1999 as permitted under Item 7
of Form 8-K.
(b) Pro forma financial information.
The Company will file pro forma financial information reflecting
the acquisition of the Partnership by amendment no later than
June 12, 1999, as permitted under Item 7 of Form 8-K
(c) Exhibits.
99.1 Press release announcing the acquisition of the 74% limited
partnership interest in the Partnership.
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.
CRESTLINE CAPITAL CORPORATION
By: /s/ Larry K. Harvey
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Larry K. Harvey
Date: March 31, 1999 Senior Vice President and Corporate Controller
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Exhibit 99.1
NEWS RELEASE
CRESTLINE CAPITAL ANNOUNCES ACQUISITION OF 74% INTEREST IN
11 RESIDENCE INN BY MARRIOTT HOTELS FOR $89 MILLION
BETHESDA, MD, March 30, 1999--Crestline Capital Corporation (NYSE:CLJ)
announced today that it has acquired a 74% limited partnership interest in the
Marriott Residence Inn USA Limited Partnership for $34.4 million. The total
consideration for this acquisition is $89 million including the consolidation of
$54.6 million in debt. The Earnings before Interest Expense, Taxes, Depreciation
and Amortization (EBITDA) is expected to be approximately $13 million on a full-
year basis.
This partnership owns a diversified portfolio of 11 Residence Inn by
Marriott properties located in eight states. The properties average nine years
in age and enjoy stabilized operations under strong management by Marriott
International. Residence Inn by Marriott is the most recognized extended-stay
brand in the lodging industry and should continue to out-perform the competition
for the foreseeable future.
Bruce D. Wardinski, Chairman of the Board, President and CEO stated, "We
are very excited about executing our first significant acquisition as a new
company. This acquisition exemplifies our investment flexibility as a C-
corporation. We are an opportunistic real estate company that will continue to
pursue attractive growth opportunities in a variety of forms."
Steven J. Fairbanks, Executive Vice President, Lodging and Senior Living
Investments, added, "We purchased this portfolio from a private Japanese partner
at a very attractive price. The first year cash on cash return is expected to
be approximately
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20% and the acquisition is expected to add $.04 per share on a full year basis.
We are currently pursuing additional transactions with other Japanese
investors."
Crestline Capital Corporation is the largest and best capitalized
independent hotel leasing company and is the owner of one of the premier
portfolios of senior living communities in the country. For further information
on Crestline Capital Corporation, please visit the Company's web site at
www.crestlinecapital.com.
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Certain matters discussed herein are forward-looking statements within the
meaning of the Private Litigation Reform Act of 1995. Certain, but not
necessarily all, of such statements can be identified by the use of forward-
looking terminology, such as "believes," "expects," "may," "will," "should,"
"estimates" or "anticipates" or the negative thereof or comparable terminology.
All forward-looking statements involve known and unknown risks, uncertainties
and other factors, which may cause the actual transactions, results, performance
or achievements of the Company to be materially different from any future
transactions, results, performance or achievements expressed or implied by such
forward-looking statements. These may include: (i) national and local
economic and business conditions or governmental regulations that will affect
demand, prices, wages or other costs for hotels and senior living communities;
(ii) the level of rates and occupancy that can be achieved by such properties;
(iii) the Company's ability to compete effectively in areas such as access,
location, quality of properties and rate structures; (iv) the ability to
maintain the properties in a first-class manner (including meeting capital
expenditure requirements; (v) the availability and terms of financing;
(vi) governmental actions and initiatives including tax law changes that may
eliminate the need for a lease structure by lodging and senior living REITs;
(vii) changes to the public
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pay systems for medical care and the need for compliance with environmental
licensure and safety requirements; and (viii) the effect on the Company of the
Year 2000 issue. Although the Company believes the expectations reflected in
such forward-looking statements are based upon reasonable assumptions and
business opportunities, it can give no assurance that its expectations will be
attained or that any deviations will not be material. The Company undertakes no
obligation to publicly release the result of any revisions to these forward-
looking statements that may be made to reflect any future events or
circumstances.
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