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This filing is made pursuant to
Rules 424(c) and 424(b)(3) under
the Securities Act of 1933, and
relates to the Prospectus dated
March 21, 1997, and the Prospectus
Supplement dated March 21, 1997,
included in the Registration
Statements on Form S-3
(Registration Nos. 333-13411
and 333-13411-01) of Starwood
Lodging Trust and Starwood
Lodging Corporation.
SUPPLEMENT dated March 24, 1997
to Prospectus Supplement dated March 21, 1997
(to Prospectus dated March 21, 1997)
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3,000,000 PAIRED COMMON SHARES
STARWOOD LODGING
STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION
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Replace page S-3 in its entirety with the page on the reverse side hereof.
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PRUDENTIAL SECURITIES INCORPORATED
March 24, 1997
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THE COMPANY
The Company is a fully integrated owner/operator of primarily full service
hotels. The Company is comprised of the Trust, which has owned hotel assets
since 1969, and the Corporation, which has managed hotel assets since 1980. As
of March 11, 1997, the Company owned, operated and managed a geographically
diversified portfolio of hotel assets (the "Hotel Assets"), including fee,
ground lease and first mortgage interests in 98 hotel properties, containing
over 26,000 rooms located in 27 states and the District of Columbia. Eighty of
such hotels are operated under licensing, membership or franchise agreements
with national hotel organizations, including Ritz Carlton(R), Westin(R),
Marriott(R), Hilton(R), Sheraton(R), Omni(R), Doubletree(R), Embassy Suites(R),
Harvey(R), Radisson(R), Clarion(R), Holiday Inn(R), Residence Inn(R), Days
Inn(R), Best Western(R), Ramada(R), Quality Inn(R) and Vagabond Inn(R).
Management believes that the Company's "paired share" ownership structure gives
it a competitive advantage over other hotel REITs and other hotel
owner/operators with respect to owning and operating hotels, as discussed below.
The Company expects to continue to enhance, expand and diversify its hotel
portfolio by continuing to make opportunistic hotel acquisitions, reinvesting
strategically in its existing portfolio and aggressively managing the Company's
owned hotels. The Company will continue to pursue the acquisition of hotels,
primarily in the midscale and upscale segments, at prices which are below
replacement cost, and that have attractive yields on investment that the Company
believes can be sustained and improved over time. Consistent with this strategy,
the Company invested approximately $841 million in hotel acquisitions during
1996 and $408 million in 1997 through March 10. See "Recent Developments."
Commensurate with the aggressive growth of the Company since the consummation of
its reorganization in January 1995, the Company has enhanced its executive
management team and will continue to enhance its management infrastructure and
operational focus. The Company also intends to pursue the acquisition or
development of a brand name for hotels.
Substantially all of the Company's interests in the Hotel Assets are held
by and its operations conducted through the Realty Partnership and the Operating
Partnership, respectively. The Company is the sole general partner of the Realty
Partnership and the managing general partner of the Operating Partnership and as
of December 31, 1996, owned a controlling interest of approximately 81.8% in
each of the Partnerships. Of the remaining 18.2% interest in each of the
Partnerships, 8.7% was owned by Starwood Capital, a private investment firm
which has made substantial opportunistic hotel investments.
The Company's paired share ownership structure is currently unique for a
hotel REIT. Other hotel REITs currently cannot operate their hotels, as income
from hotel operations does not qualify as rent for REIT tax qualification
purposes, and therefore must enter into agreements with third party
lessees/operators. The Company's shareholders own both the owner, the Trust, and
the lessee/operator, the Corporation, of the Company's hotels and retain the
economic benefits of both the lease payments received by the Trust and the
operating profits realized by the Corporation while maintaining the tax benefits
of the Trust's REIT status. Furthermore, the Company is able to prevent the
erosion of value of its assets that results from encumbering such properties
with long-term third party leases or management contracts. The pairing
arrangement creates total commonality of ownership, as the shares of beneficial
interest of the Trust (the "Trust Shares") and the shares of common stock of the
Corporation (the "Corporation Shares") are paired on a one for one basis and may
only be held or transferred as units consisting of one Trust Share and one
Corporation Share ("Paired Common Shares").
THE OFFERING
<TABLE>
<S> <C>
Paired Common Shares Offered Hereby................... 3,000,000 shares
Paired Common Shares Outstanding After the Offering... 46,000,615 shares(1)
Use of Proceeds....................................... The net proceeds of the Offering,
which are expected to be
approximately $130.0 million, will be
used to fund current and future
acquisitions and for general
corporate purposes.
New York Stock Exchange Symbol........................ HOT
</TABLE>
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(1) Excludes 12,877,385 Paired Common Shares which are issuable upon the
exchange of Units. Excludes 4,964,174 Paired Common Shares issuable pursuant
to outstanding options and 514,584 Paired Common Shares subject to
restricted stock awards.
S-3
