MHX Meristar Hosp Cp

MeriStar Hospitality Corporation (NYSE: MHX), one of the nation's largest hotel real estate investment trusts (REIT), today announced that it has sold the 204-room Hilton Monterey to Valencia, Calif.-based Ocean Park Hotels, a hotel developer, owner and operator, for $20.5 million, or approximately $100,000 per key. Ocean Park Hotels said it plans to manage the hotel and invest approximately $5 million in renovations. "We were able to sell this property for almost 20 times trailing-twelve-month EBITDA* and reduce our required capital expenditures," said Paul Whetsell, chairman and CEO. "When you factor in the capital spending avoided as a result of the transaction, our sales multiple would have been approximately 25 times." The company plans to use the proceeds of the sale for business purposes including debt reduction and capital expenditures for its existing assets. The company has indicated that its 2005 earnings guidance includes approximately $40 million in sales proceeds in addition to the Hilton Monterey proceeds. The company expects to complete these dispositions in the third quarter. "We will continue to review our portfolio and take advantage of opportunities to divest selected properties at attractive pricing and where we believe we can more effectively redeploy the proceeds into uses that will be accretive to our shareholders," Whetsell stated. Arlington, Va.-based MeriStar Hospitality Corporation owns 72 principally upscale, full-service hotels in major markets and resort locations with 20,115 rooms in 22 states and the District of Columbia. The company owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Ritz-Carlton, Westin, Doubletree and Radisson. For more information about MeriStar Hospitality, visit the company's Web site: www.meristar.com. *EBITDA is a non-GAAP financial measure and should not be considered as alternatives to any measures of operating results under GAAP. Trailing-twelve-month Net Loss for the Hilton Monterey was $(0.3) million, which consisted of $1.0 million of EBITDA less $1.3 million of depreciation and amortization. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, which are based on various assumptions and describe our future plans, strategies and expectations, are generally identified by our use of words such as "intend," "plan," "may," "should," "will," "project," "estimate," "anticipate," "believe," "expect," "continue," "potential," "opportunity," and similar expressions, whether in the negative or affirmative. We cannot guarantee that we actually will achieve these plans, intentions or expectations. All statements regarding our expected financial position, business and financing plans are forward-looking statements. Except for historical information, matters discussed in this press release are subject to known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to: economic conditions generally and the real estate market specifically; supply and demand for hotel rooms in our current and proposed market areas; other factors that may influence the travel industry, including health, safety and economic factors; competition; cash flow generally, including the availability of capital generally, cash available for capital expenditures, and our ability to refinance debt; the effects of threats of terrorism and increased security precautions on travel patterns and demand for hotels; the threatened or actual outbreak of hostilities and international political instability; governmental actions, including new laws and regulations and particularly changes to laws governing the taxation of real estate investment trusts; weather conditions generally and natural disasters; rising interest rates; and changes in generally accepted accounting principles, policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating any forward-looking statements contained in this press release or incorporated by reference herein. All forward-looking statements speak only as of the date of this press release or, in the case of any document incorporated by reference, the date of that document. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are qualified by the cautionary statements in this section. We undertake no obligation to update or publicly release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.