Article Excerpt:
TWST: What is Highland Hospitality?Mr. Francis: Highland is a self-advised lodging REIT. We are focused on the higher upscale segments in the lodging industry, particularly in the United States. This is the full service brands of Marriott, Hilton, Hyatt and Starwood. We started an IPO in December of 2003, as well as a private offering and raised approximately $400 million of equity. We have leveraged that equity with debt and have acquired 20 hotels to date. Nineteen of the 20 are in the United States, and we have one in Mexico through a strategic arrangement with the Barcelo company out of Spain. Since the initial capital, we raised additional capital in a secondary offering just last month, and we raised a total of about $190 million between common equity and preferred stock offerings. We will invest those proceeds and additional assets, and those will likely be announced over the next 45 days. So by the end of the year, we'll have assets on the balance sheet in the $1.1 billion range. It makes us a solid mid-cap company. Again, we've continued to focus on external acquisitions in growing our asset base. We've spent a tremendous amount of time this year on our current assets and investing in them to the tune of about $60 million. We've renovated about half of our existing portfolio of rooms to significantly enhance the quality of the assets: all of the touch points with the guests, the room product, the quarters, the lobby, the restaurants and the lounges. So it significantly enhances the quality of our assets that are on the balance sheet today, which will drive significant growth for us as we go into 2006 and 2007. We have a very intense asset management approach to our balance sheet today. We've moved the brands upscale in several of those assets, as well as rebranded ones. We've changed management companies in several hotels to higher quality ones. We've had disruption at the property level in our operating performance because we have rooms out of service and lobbies and restaurants under construction, which have impacted our number in 2005. As we go into 2006 and 2007, we have a very compelling growth story based on the assets we have on the balance sheet and their internal growth capabilities. With the additional capital we've recently raised, we'll leverage that capital, and within the next several months, we'll have $1.1 to $1.2 billion of assets on the balance sheet.
Tickers included in this excerpt: HIH
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