Marriott International, Inc. announced that it has completed the sale of a portfolio of…
Marriott International, Inc. announced that it has completed the sale of a portfolio of land underlying 75 Courtyard by Marriott hotels to CBM Land Joint Venture limited partnership (CBM Land JV). CBM Land JV is a joint venture majority- owned by Sarofim Realty Advisors (Sarofim), on behalf of an institutional investor. In addition, Marriott announced that it has contributed land underlying an additional 9 Courtyard hotels, to CBM Land JV, thereby retaining an approximately 23 percent equity stake in CBM Land JV.
As a result of the land sale, Marriott expects to record a one-time pre-tax gain in 2005. As a result of the lost rental income, operating income in 2006 will be reduced.
Arne M. Sorenson, Marriott’s executive vice president and chief financial officer, and president of continental European lodging, said, “We are pleased to conclude a transaction that both meaningfully benefits our return on invested capital moving forward and aligns well with our strategy of creating value through managing hotels rather than owning real estate.”
The 84 parcels of land continue to be leased to the Courtyard by Marriott Joint Venture, which was substantially acquired by Sarofim Realty Advisors for the same institutional client on March 29, 2005. That acquisition recapitalized that joint venture and accelerated the reinvention of its 120 Courtyard hotels. Similar to today’s announcement, in that transaction Marriott agreed to maintain a minority ownership stake in that joint venture for at least three years.
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