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): October 16, 1998
COURTYARD BY MARRIOTT II LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Delaware 0-16728 52-1533559
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State or other jurisdiction of (Commission File Number) (I.R.S.Employer
incorporation or organization) Identification No.)
10400 Fernwood Road, Bethesda, MD 20817-1109
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 301-380-2070
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ITEM 5. OTHER EVENTS
On October 1, 1998, the General Partner sent to the Limited Partners of the
Partnership a letter to inform them that the proposed Consolidation to form a
new REIT focused on limited service hotels is no longer being pursued. In
addition, the letter informs the Limited Partners that, to date, there have been
no acceptable offers from third parties to purchase the Partnership's hotels.
Such a letter is being filed as an exhibit to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Letter from the General Partner to the Limited Partners of the
Partnership, dated October 1, 1998.
<PAGE>
SIGNATURE
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.
COURTYARD BY MARRIOTT II
LIMITED PARTNERSHIP
By: CBM TWO CORPORATION
General Partner
October 16, 1998 By: /s/ Bruce F. Stemerman
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Name: Bruce F. Stemerman
Title: President
<PAGE>
EXHIBIT INDEX
Exhibit No.: Description:
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99.1 Letter from the GeneralPartner to the
Limited Partners of Courtyard by
Marriott II Limited Partnership,
dated October 1, 1998
<PAGE>
EXHIBIT 99.1
October 1, 1998
Dear Limited Partner:
The General Partner previously advised you that it is reviewing strategic
alternatives that could result in increased liquidity for Limited Partners. In
December 1997, we reported that Host Marriott Corporation ("Host"), on behalf of
the General Partner, filed a preliminary Prospectus /Consent Solicitation
Statement with the SEC. This statement proposed the consolidation (the
"Consolidation") of this Partnership and five other limited partnerships into a
publicly traded real estate investment trust (REIT). Subsequently, we reported
to you that there were existing REITs active in the moderate price and
extended-stay hotel segment that had expressed an interest in acquiring some of
the hotels owned by the six limited partnerships. The General Partner retained
Merrill Lynch to advise the Partnerships with respect to these alternatives.
You may also be aware that although the hotel industry is generally continuing
to report improving operating results, stock prices for the companies that own
hotels, including REITs, have been on a downward slide. There are a number of
reasons given by the industry's analysts for this development ranging from
increased supply in certain segments of the market to the global market trends
influencing the US securities markets. The effect of these developments is that
many of the traditional purchasers of hotels such as those owned by the
Partnership are restricted in their ability to raise capital to purchase hotels.
Although over the past months we have reviewed various alternatives, to date,
there have been no acceptable offers from third parties to purchase the
Partnership's hotels.
These same market conditions have adversely affected the proposed Consolidation
that would form a new REIT focused on limited service hotels. The original
Consolidation plan included an initial public offering (IPO) of the REIT's
common shares. We have been advised that it would be difficult to raise the
appropriate level of outside equity and that the perceived benefits of the
Consolidation are not achievable at this time. Therefore, we are not pursuing
the plan to form a new REIT.
Based on current market conditions, we are not optimistic that we will identify
an acceptable offer to purchase the hotels in the near future. As market
conditions change, we will reevaluate our strategy as we continue to explore
alternatives to provide liquidity for the Partnership.
The General Partner will continue to work to maximize the long term value of
your investment. The Third Quarter Report for the Partnership will be mailed in
November. It will include an update of Partnership operations as well as
estimates for the remaining 1998 cash distributions and tax loss/income
allocations.
If you have any questions regarding the information in this letter or any other
aspect of your investment, please contact Partnership Investor Relations at
301/380-2070.
Sincerely yours,
CBM TWO CORPORATION
General Partner
Bruce F. Stemerman
President
