Red Lion Hotels Announces Sale of its Sacramento Hotel; Adds New Sacramento Franchise
Red Lion Hotels Corporation (NYSE: RLH) announced today it has sold for$9.0 milliontheRed Lion Hotel SacramentoatArden Village. This hotel was previously leased to the buyer. As part of the transaction, the franchise agreement at that location will terminate and a new franchise will be added inSacramento.
"This transaction supports our strategy to reduce debt, expand our franchise system and improve the competitive position of our hotels," saidJon E. Eliassen, President and Chief Executive Officer ofRed Lion Hotels Corporation. "We sold our property inSacramentoand added a new franchise hotel with extensive meeting and banquet facilities that make it a much better fit in that market for the Red Lion brand going forward."
InNovember 2011, the company acquired ownership of theRed Lion Hotel SacramentoatArden Villageas part of an agreement with iStar Financial Inc. to purchase 10 previously leased hotels. The company has been leasing the property to a company owned byKumar Sharma, which has now purchased the hotel from Red Lion. As part of the transaction, Sharma's subsidiary,Shri Vinayaka Hotel Inc., has signed a new franchise license agreement withRed Lion Hotelsfor the formerWoodlake Hotel Sacramento, a property he also owns.
"Our new franchised property inSacramentois in a wonderful location and is a great fit for our customers," saidRon Burgett, Executive Vice President of Lodging andBrand DevelopmentforRed Lion Hotels. "And, we are especially pleased to carry forward our business relationship withMr. Sharma."
The new franchise, theRed Lion Hotel Woodlake Conference Center Sacramento, is located at500 Leisure Laneon the scenic shores of a private lake, just three miles from theSacramentocity center. The full service hotel offers 306 guest rooms, 60,000 square feet of meeting space, a fitness center and an outdoor pool. The Lakeside Bar and Grille in the lobby of the hotel is known for its views and for its Mediterranean and California Fresh cuisine. The property is a popular wedding and meeting venue.
"Red Lion is well-recognized inNorthern California," saidKumar Sharmaof Shri Vinayaka Hotel, Inc. "We are looking forward to our continued franchise relationship with Red Lion and all of the benefits we expect to have from converting an independent hotel to a trusted brand."
About RLH Corporation
RLH Corporation is an innovative hotel company focused on the franchising of upscale, midscale and economy hotels. The company maximizes return on invested capital for hotel owners across North America through relevant brands, industry-leading technology and forward-thinking services. For more information, please visit the company's website at www.rlhco.com.
