Hilton sold for nearly $80 million

Robert Chacon

Hilton Hotels Corp. has sold the Glendale Hilton for $79.8 million,

the company announced Thursday.

The hospitality industry giant will continue managing the

19-story, 351-room hotel for buyer Eagle Hospitality Properties

Trust, based in Kentucky. The hotel will also retain the Hilton name.

This is the ninth property this year sold by Hilton -- the seventh

in the last week -- as the company tries to balance its three major

revenue streams, said Robert LaForgia, Hilton’s chief financial

officer and senior vice president.

“We have an overall strategy to shift our mix of business,”

LaForgia said, adding that the company is selling a total 12

properties.

Attaining a more even balance of earned income from hotel

ownership, management fees and time-share properties will allow the

company better protection during a cyclical slowdown, he said.

Currently, more than half of its revenue derives from hotel

ownership.

Hilton acquired the hotel, formerly Red Lion Inn, as part of its

purchase of Promus Hotel Corp. in 1999 for $3.7 billion. From that

purchase, the company acquired 1,700 hotels.

Hilton has annual revenues of $4.1 billion.

None of the hotel’s 202 full-time and 35 part-time employees will

be affected by the transition, said Raymond Martz, chief financial

officer of Eagle Hospitality.

A major factor behind Eagle’s purchase was the booming hotel

industry in the tri-cities area of Glendale, Burbank and Pasadena.

Together, the cities have posted strong consistent demand the past

decade and the market is poised to continue generating healthy demand

in the coming year, said Brian Geurnier, senior vice president of

acquisitions.

“Office trends in the area are great,” Martz said. “With companies

like Disney, DreamWorks, Nestle and IHOP, it’s a great place to do

business.”

Another consideration in the purchase was the lack of plans for a

new major hotel in the area, he said.

“There is nothing in the pipeline,” he said.

The deal continues a long-standing relationship. More than 70% of

the hotel rooms owned by Eagle Hospitality are under one of Hilton’s

brand names. Hilton also operates hotels under the Embassy Suites,

Double Tree, Hampton Inn & Suites, Conrad, Homewood Suites, and other

brands.

In addition to 351 rooms, the Glendale Hilton comprises 15,000

square feet of meeting space, an 80,000-square-foot ballroom,

3,100-square-foot executive conference area and two restaurants.

At closing, stock price for Eagle Hospitality was down 15 cents to

$9.15 per share, and Hilton stock was also down 35 cents to $23.65

per share.

* ROBERT CHACON covers business and politics. He may be reached at

(818) 637-3239 or at robert.chaconlatimes.com.