<PAGE> 1
================================================================================
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): May 16, 1996
Commission File Number: 1-6828 Commission File Number: 1-7959
STARWOOD LODGING STARWOOD LODGING
TRUST CORPORATION
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
Maryland Maryland
(State or other jurisdiction (State or other jurisdiction
of incorporation or organization) of incorporation or organization)
52-0901263 52-1193298
(I.R.S. employer identification no.) (I.R.S. employer identification no.)
11835 W. Olympic Blvd., Suite 695 11835 W. Olympic Blvd., Suite 675
Los Angeles, California 90064 Los Angeles, California 90064
(Address of principal executive (Address of principal executive
offices, including zip code) offices, including zip code)
(310) 575-3900 (310) 575-3900
(Registrant's telephone number, (Registrant's telephone number,
including area code) including area code)
================================================================================
<PAGE> 2
Item 5. Other Events.
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, Starwood Lodging Trust (the "Trust") and Starwood
Lodging Corporation (together with the Trust, the "Company") is hereby filing
cautionary statements identifying important factors that could cause the
Company's actual results to differ materially from those projected in forward
looking statements of the Company made by or on behalf of the Company.
Item 7. Financial Statements and Exhibits.
Exhibits
99.1 Cautionary Statement for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act
of 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION
By: /s/ RONALD C. BROWN By: /s/ ALAN M. SCHNAID
_____________________________ _____________________________
Ronald C. Brown Alan M. Schnaid
Vice President and Corporate Controller
Chief Financial Officer Principal Accounting Officer
Date: May 16, 1996
<PAGE> 1
Exhibit 99.1
CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Starwood Lodging Trust (the "Trust") and Starwood Lodging Corporation
(the "Corporation" and, with the Trust, the "Company") have filed this Current
Report on Form 8-K to take advantage of the new "safe harbor" provisions with
respect to forward-looking statements provided by the Private Securities
Litigation Reform Act of 1995.
The Company wishes to caution readers that the following important
factors, among others, could affect the Company's actual results, and could
cause those results to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company. Many of these
factors have been discussed in the Company's prior filings with the Securities
and Exchange Commission.
All references to the Company in this Form 8-K include the Trust and
the Corporation and those entities respectively owned or controlled by the Trust
or the Corporation, including SLT Realty Limited Partnership (the "Realty
Partnership") and SLC Operating Limited Partnership (the "Operating Partnership"
and, with the Realty Partnership, the "Partnerships").
GENERAL FACTORS AFFECTING INVESTMENTS IN THE HOTEL INDUSTRY
Operating Risks. The properties of the Company are subject to all
operating risks common to the hotel industry. These risks include: changes in
general economic conditions; the level of demand for rooms and related services;
cyclical over-building in the hotel industry; restrictive changes in zoning and
similar land use laws and regulations or in health, safety and environmental
laws, rules and regulations; the inability to secure property and liability
insurance to fully protect against all losses or to obtain such insurance at
reasonable rates; and changes in travel patterns. In addition, the hotel
industry is highly competitive. The properties of the Company compete with other
hotel properties in their geographic markets. However, some of the Company's
competitors may have substantially greater marketing and financial resources
than the Company.
The Company may compete for acquisition opportunities with entities
which have substantially greater financial resources than the Company. These
entities may generally be able to accept more risk than the Company can
prudently manage. Competition may generally reduce the number of suitable
investment opportunities offered to the Company and increase the bargaining
power of property owners seeking to sell. Further, management believes that it
will face competition for acquisition opportunities from entities organized for
purposes substantially similar to the objectives of the Company.
Franchise Agreement Risks. The majority of the Company's hotels were
operated pursuant to existing franchise or license agreements (the "Franchise
Agreements"). Franchise agreements generally contain specific standards for, and
restrictions and limitations on, the operation and maintenance of a hotel
property in order to maintain uniformity in the system created by the
franchisor. In addition, compliance with such standards could require a
franchisee to incur significant expenses or capital expenditures. Certain of the
Franchise Agreements require the Company to obtain the consent of the franchisor
to certain matters, including certain securities offerings.
Seasonality of Hotel Business. The hotel industry is seasonal in
nature. Generally, hotel revenues are greater in the second and third quarters
than in the first and fourth quarters. As a result, the Trust may be required
from time to time to borrow to provide funds necessary to make quarterly
distributions.
Regulation of Gaming Operations. The Company's casino gaming facilities
located in Las Vegas, Nevada are subject to extensive licensing and regulatory
control by the Nevada Gaming Commission (the "Nevada Commission") and other
Nevada authorities. These regulatory authorities have broad powers with respect
to the
<PAGE> 2
licensing of gaming operations, and may revoke, suspend, condition or limit the
gaming approvals and licenses of the Corporation and its gaming subsidiary,
impose substantial fines and take other actions, any of which could have a
material adverse effect on the Corporation's business and the going concern
value of the Trust's hotel/casinos. Directors, officers and certain key
employees of the Corporation and its gaming subsidiary are subject to licensing
or suitability determinations by the Nevada Commission and local gaming
authorities. If the Nevada Commission were to find a person occupying any such
position unsuitable, the Corporation would be required to sever its relationship
with that person.
REAL ESTATE INVESTMENT RISKS
General Risks. Real property investments are subject to varying degrees
of risk. The investment returns available from equity investments in real estate
depend in large part on the amount of income earned and capital appreciation
generated by the related properties as well as the expenses incurred. If the
properties of the Company do not generate revenue sufficient to meet operating
expenses, including debt service and capital expenditures, the income of the
Company and its ability to make distributions to its shareholders will be
adversely affected. In addition, income from properties and real estate values
are also affected by a variety of other factors, such as governmental
regulations and applicable laws (including real estate, zoning and tax laws),
interest rate levels and the availability of financing. In addition, equity real
estate investments, such as the investments held by the Company and any
additional properties that may be acquired by the Company, are relatively
illiquid.
Possible Liability Relating to Environmental Matters. Under various
federal, state and local environmental laws, ordinances and regulations, a
current or previous owner or operator of real property may become liable for the
costs of removal or remediation of hazardous or toxic substances on, under or in
such property. Such laws often impose liability without regard to whether the
owner or operator knew of, or was responsible for, the presence of such
hazardous or toxic substances. The presence of hazardous or toxic substances, or
the failure properly to remediate such substances when present, may adversely
affect the owner's ability to sell or rent such real property or to borrow using
such real property as collateral. Persons who arrange for the disposal or
treatment of hazardous or toxic wastes may be liable for the costs of removal or
remediation of such wastes at the disposal or treatment facility, regardless of
whether such facility is owned or operated by such person. Other federal, state
and local laws, ordinances and regulations require abatement or removal of
certain asbestos-containing materials in the event of demolition or certain
renovations or remodeling and govern emissions of and exposure to asbestos
fibers in the air. The operation and subsequent removal of certain underground
storage tanks also are regulated by federal and state laws. Future remediation
costs are not expected to have a material adverse effect on the Company's
results of operations or financial position and compliance with environmental
laws has not had and is not expected to have a material effect on the capital
expenditures, earnings or competitive position of the Company.
RISKS OF DEBT FINANCING
As a result of incurring debt, the Company is subject to the risks
normally associated with debt financing, including the risk that cash flow from
operations will be insufficient to meet required payments of principal and
interest. A majority of the hotels are mortgaged to secure payment of certain of
this indebtedness, and if the mortgage payments cannot be made, a loss could be
sustained as a result of a foreclosure by the mortgagee.
The Company currently maintains floating rate indebtedness, and may
utilize floating rate financing in future transactions. Increases in these
interest rates could adversely affect the Company's FFO and adversely impact its
ability to meet its debt service.
The Company is obligated to repay certain of this indebtedness in the
near future when it matures. Although the Company anticipates that it will be
able to repay or refinance such indebtedness and any other indebtedness, there
can be no assurance that it will be able to do so or that the terms of such
refinancings will be favorable to the Company.
-2-
