The development firm controlled by Robert L. Johnson has signed a deal to buy 100 hotels for $1.7 billion, a significant expansion of the real estate holdings of the founder of the Black Entertainment Television network.
Johnson’s RLJ Development LLC said Monday that it will purchase the properties, most of them operating under Hilton and Marriott brand names, from the hotel company White Lodging Services, based in Merrillville, Ind. The hotels are in 12 states including Illinois, Texas, Colorado, Florida and Indiana.
One of the holding companies Johnson formed after he sold BET to Viacom Inc. in 2001 for $3 billion, RLJ Development currently holds 30 properties. The company will acquire 87 of the White Lodging properties in the second quarter of 2006. The other 13 are under construction, and closing is expected within two years. White Lodging will continue to manage the hotels.
“We are thrilled to add these hotel properties to the RLJ Development portfolio,” Johnson said.
RLJ Development invests in upscale urban hotels, most of them under Hilton and Marriott brand names. In December, it closed its first private equity fund, the RLJ Urban Lodging Fund, that held a purchasing power of $900 million from investments by public and private pension funds, along with other investors.
Johnson, who formed BET in 1979 and owns the NBA’s Charlotte Bobcats, is also on the board of directors of Hilton Hotels Corp.
White Lodging, founded in 1985 by billionaire Dean White of Crown Point, Ind., had said in October it was seeking to sell the hotels in order to generate cash and concentrate on hotel management.
White Lodging does not expect any layoffs and plans to use proceeds from the sale to expand into other markets, said Judy Bronowski, the company’s vice president of strategic planning and communications.
“We’re muscle-building our organization and adding resources,” she said. “It’s part of our strategy to generate the liquidity so we can continue growing.”