Humphrey Hospitality Trust 07.16.01

Humphrey REIT Looks at Management Arm Options

Columbia-based Humphrey Hospitality Trust is nearing a decision on whether to restructure the leases with its operating arm Humphrey Hospitality Management.

The management arm was formed to run the 92 hotels in the hospitality real estate investment trust's portfolio. The hospitality real estate investment trust leases its hotels to the management company, which in turn operates them.

Last year, the management company suffered a substantial loss -- $2.4 million. It expects a similar loss this year because of higher energy costs, increased competition and falling demand for hotel rooms.

Last spring, the REIT's board began to look into options for dealing with the management company's hard times. In April, the Humphrey trust (http://www.humphreyhospitality. com) brought on New York-based Cohen & Steers Capital Advisors to study the options, including amending existing leases to reduce the rent for the management company; forming a third-party company to manage the hotels; and selling Humphrey's nonstrategic hotels.

Mike Schurer, chief financial officer of Humphrey, says the management arm does not want to continue its pace "given the forecast for 2001."

Last year, the REIT reported its revenue grew 109 percent to $33.2 million, and total funds from operations increased 90 percent to $16.3 million, largely because of Humphrey's 1999 merger with Supertel Hospitality.

The REIT owns 92 limited-service hotels in 19 states in the East and Midwest.

... The 202-suite Residence Inn-Washington, D.C. at Thomas Circle has changed hands.

Sources say the hotel -- located at 1199 Vermont Ave. NW -- sold to JWM Family Enterprises for about $38.5 million.

The Residence Inn was under contract to another buyer and was scheduled to close in March, but the buyer changed its mind at settlement and forfeited the deposit.

The Residence Inn at Thomas Circle was built in 1999. The Vermont Co. transformed the original office building into a 202-suite extended stay hotel.

Insignia/ESG Hotel Partners represented the seller, The Vermont Co.

... D.C.-based Hospitality Sales & Marketing Association International will host its annual Affordable Meetings National exposition at the Washington Convention Center Sept. 5-6.

The event will include seminars and workshops about cost-effective meeting planning to qualified planners from across the country.

Affordable Meetings National also will include a trade show with more than 650 exhibitors including hotels, universities, convention and visitor bureaus, and transportation companies.

HSMAI has more than 5,000 members from 35 countries.

... Rockville-based RMR & Associates has signed on a new client -- the historic Sewall-Belmont House.

The Sewall-Belmont House has been the headquarters of the National Woman's Party (http://www.natwomanparty.org), a political suffragist organization. NWP operates the Sewall-Belmont House as a museum, which houses a collection of artifacts from the suffrage movement as well as one of the earliest feminist libraries in the country.

RMR (http://www.rmr.com) will provide the Sewall-Belmont House with marketing communications support and promotional collateral design.