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Filed pursuant to Rule 424(b)(3)
Registration No. 333-78091
Prospectus Supplement to
Prospectus dated July 2, 1999.
1,948,365 Shares
Host Marriott Corporation
Common Stock
This prospectus supplement amends and supplements our prospectus dated July 2, 1999. The prospectus relates to the offer and sale from time to time by the selling shareholders of our common stock issuable upon the redemption of units of limited partner interest in Host Marriott, L.P., if and to the extent that such selling shareholders redeem their units and we elect to issue shares of common stock in exchange for these units. You should read this prospectus supplement in conjunction with the accompanying prospectus.
Our common stock is listed on the New York Stock Exchange under the symbol “HMT”. The last reported sale price of the common stock on May 18, 2005 was $16.86 per share.
Investing in our common stock involves risks. See “ Risk Factors” on page S-5 of this prospectus supplement to read about matters you should consider before buying shares of the common stock.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
Prospectus Supplement dated May 19, 2005.
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| Page | ||
| Prospectus Supplement | ||
| S-2 | ||
| S-3 | ||
| S-4 | ||
| S-5 | ||
| S-5 | ||
| S-6 | ||
| S-7 | ||
| Prospectus | ||
| About this Prospectus |
1 | |
| Where You Can Find More Information |
1 | |
| Special Note Regarding Forward-Looking Statements |
2 | |
| The Company |
3 | |
| No Proceeds to the Company. |
3 | |
| Selling Shareholders. |
3 | |
| Plan of Distribution. |
4 | |
| Experts |
5 | |
| Legal Matters |
5 | |
This prospectus supplement contains registered trademarks that are the exclusive property of their respective owners, which are companies other than us, including Marriott®, Ritz-Carlton®, Hyatt®, Four Seasons®, Fairmont®, Hilton® and Westin®. None of the owners of these trademarks, their affiliates or any of their respective officers, directors, agents or employees, is an issuer or underwriter of the securities being offered. In addition, none of such person has or will have any responsibility or liability for any information contained in this prospectus supplement.
ABOUT THIS PROSPECTUS SUPPLEMENT
In this prospectus supplement references to “Host Marriott,” “we,” “us” and “our” are to Host Marriott Corporation, a Maryland corporation.
This prospectus supplement, or the information incorporated by reference, may add, update or change information in the accompanying prospectus. If information in this prospectus supplement, or the information incorporated by reference, is inconsistent with the accompanying prospectus, this prospectus supplement or the information incorporated by reference will apply and will supersede that information in the accompanying prospectus. Information incorporated by reference to our filings with the Securities and Exchange Commission, or Commission, after the date of this prospectus supplement may add, update or change information in this prospectus supplement and the accompanying prospectus. If information in such subsequent filings is inconsistent with the accompanying prospectus or this prospectus supplement, the information incorporated by reference will apply and will supersede that information in this prospectus supplement and the accompanying prospectus. You should not assume that the information contained in this prospectus supplement or the accompanying prospectus is accurate as of any date other than their respective dates.
It is important for you to read and consider all information contained in this prospectus supplement, the accompanying prospectus and the information incorporated by reference in making your investment decision. You should also read and consider the information in the documents we have referred you to under the heading “Where You Can Find More Information” in this prospectus supplement. We will provide to each person, including any beneficial owner, to whom this prospectus supplement is delivered a copy of any or all of the information that we have incorporated by reference into this prospectus supplement but not delivered with this prospectus supplement. To receive a free copy of any of the documents incorporated by reference in this prospectus supplement, other than exhibits, unless they are specifically incorporated by reference in those documents, call or write to our Corporate Secretary, Host Marriott Corporation, 6903 Rockledge Drive, Suite 1500, Bethesda, Maryland, 20817 ((240) 744-1000). Documents incorporated by reference in this prospectus supplement are also available on our internet website at www.hostmarriott.com.
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You should rely only on the information contained in, or incorporated by reference into, this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with different information. This prospectus supplement is an offer to sell only the shares offered hereby and only under the circumstances and in the jurisdictions where it is lawful to do so.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the Commission. You may read and copy materials that we have filed with the Commission, including the registration statement, at the following Commission public reference rooms:
| 450 Fifth Street, N.W. |
500 West Madison Street | |
| Room 1024 |
Suite 1400 | |
| Washington, D.C. 20549 |
Chicago, Illinois 60661 |
Please call the Commission at 1-800-SEC-0330 for further information on the public reference rooms.
Our Commission filings can also be read at the following address:
New York Stock Exchange
20 Broad Street
New York, New York 10005
Our Commission filings are also available to the public on the Commission’s Web Site at http://www.sec.gov and on our website at www.hostmarriott.com.
The Commission allows us to “incorporate by reference” the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the Commission will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until all of the offered securities to which this prospectus relates have been sold or the offering is otherwise terminated.
1. Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (filed on March 1, 2005).
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (filed on May 3, 2005).
3. Current Reports on Form 8-K (filed on January 6, 2005, February 24, 2005, February 24, 2005, March 2, 2005, March 3, 2005, March 4, 2005, March 15, 2005, March 21, 2005, March 21, 2005, April 25, 2005, April 27, 2005).
4. Description of our common stock included in a Registration Statement on Form 8-A filed on November 18, 1998 (as amended on December 28, 1998).
5. Description of our rights included in a Registration Statement on Form 8-A filed on December 11, 1998 (as amended on December 24, 1998).
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We will provide to each person, including any beneficial owner, to whom this prospectus is delivered a copy of any or all of the information incorporated by reference into this prospectus. You may request a free copy of these documents by writing us at the following address or telephoning us at (240) 744-1000 between the hours of 9:00 a.m. and 5:00 p.m., Eastern Time:
Corporate Secretary
Host Marriott Corporation
6903 Rockledge Drive, Suite 1500
Bethesda, Maryland 20817
In this prospectus supplement and in the information incorporated by reference we make some “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are included throughout this prospectus supplement and the information incorporated by reference herein, including in the section entitled “Risk Factors” and relate to, among other things, analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “continue,” and other similar terms and phrases, including references to assumptions.
These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Factors which may cause our actual results, performance or achievements to be materially different from those expressed or implied by us in the forward-looking statements include, among others, the following:
| • | national and local economic and business conditions and changes in travel patterns that will affect demand for products and services at our hotels, the level of room rates and occupancy that can be achieved by such properties and the availability and terms of financing and our liquidity; |
| • | changes in taxes and government regulations that influence or determine wages, prices, construction procedures and costs; |
| • | our ability to maintain properties in a first-class manner, including meeting capital expenditure requirements; |
| • | our ability to compete effectively in areas such as access, location, quality of accommodations and room rate; |
| • | our ability to acquire or develop additional properties and the risk that potential acquisitions or developments may not perform in accordance with expectations; |
| • | our degree of leverage, which may affect our ability to obtain financing in the future; |
| • | the reduction in our operating flexibility and our ability to pay dividends resulting from restrictive covenants contained in our debt agreements, including the risk of default that could occur, and in the terms of our preferred stock; |
| • | the effect of terror alerts and potential terrorist activity on travel and our ability to recover fully under our existing insurance for terrorist acts and our ability to maintain adequate or full replacement cost “all-risk” property insurance on our properties; |
| • | government approvals, actions and initiatives, including the need for compliance with environmental and safety requirements, and changes in laws and regulations or the interpretation thereof; |
| • | the effects of tax legislative action; |
| • | our ability to continue to satisfy complex rules in order for us to maintain our status as a real estate investment trust, or REIT, for federal income tax purposes, the ability of Host Marriott, L.P. to satisfy the rules to maintain its status as a partnership for federal income tax purposes, the ability of certain of our subsidiaries to maintain their status as taxable REIT subsidiaries for federal income tax purposes, and our ability and the ability of our subsidiaries to operate effectively within the limitations imposed by these rules; |
| • | the effect of any rating agency downgrades on the cost and availability of new debt financings; |
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| • | the relatively fixed nature of our property-level operating costs and expenses; and |
| • | other factors discussed under the heading “Risk Factors” and in other filings with the Commission. |
Although we believe that the expectations reflected in any of our forward-looking statements are based upon reasonable assumptions, any of these assumptions could prove to be inaccurate and the forward-looking statement based on these assumptions could be incorrect and actual results could differ materially from those projected or assumed. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent known and unknown risks and uncertainties. Accordingly, our forward-looking statements are qualified in their entirety by reference to the factors described above and under the heading “Risk Factors” and in the information incorporated by reference herein. Except as otherwise required by the federal securities laws, we disclaim any obligation to publicly release any updates or revisions to any forward-looking statement contained in this prospectus supplement to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
We are a self-managed and self-administered REIT that owns full-service hotel properties. As of May 13, 2005, we owned 107 upper-upscale and luxury full-service hotels containing approximately 55,000 rooms located throughout the United States, in Toronto and Calgary, Canada and in Mexico City, Mexico. Our hotels are operated under brand names that are among the most respected and widely recognized in the lodging industry—including Marriott®, Ritz-Carlton®, Hyatt®, Four Seasons®, Fairmont®, Hilton® and Westin®.
We were formed as a Maryland corporation in 1998. As part of our efforts to reorganize our business operations to qualify as a REIT for federal income tax purposes, on December 29, 1998 we succeeded by merger to the hotel ownership business formerly conducted by Host Marriott Corporation, a Delaware corporation. We conduct our business as an umbrella partnership REIT through our direct and indirect subsidiaries, including Host Marriott, L.P., a Delaware limited partnership of which we are the sole general partner and in which we hold approximately 94% of the partnership interests as of May 1, 2005.
The address of our principal executive office is 6903 Rockledge Drive, Suite 1500, Bethesda, Maryland, 20817. Our phone number is (240) 744-1000. Our Internet website address is www.hostmarriott.com.
You should carefully consider the risk factors and other information included or incorporated by reference in this prospectus supplement and the accompanying prospectus before you decide to buy our common stock.
Before you decide to buy our common stock, you should carefully consider the risk factors set forth under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, the matters discussed in the section entitled “Management’s Discussion and Analysis of Results of Operations and Financial Condition” in our Quarterly Reports on Form 10-Q and the federal income tax considerations discussed in our Form 8-K filed March 2, 2005, which are incorporated by reference into this prospectus supplement and the accompanying prospectus. These risk factors and other information may be updated from time to time by our future filings under the Securities Exchange Act of 1934, as amended, or by additional prospectus supplements. For more information, see the section entitled “Where You Can Find More Information” in the accompanying prospectus.
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CH ANGES TO SELLING SHAREHOLDER INFORMATION
Since the date of the accompanying prospectus, the selling shareholders named therein have sold a total of 45,765,510 shares. Accordingly, the total number of shares that remain to be offered pursuant to this prospectus supplement is 1,948,365. Each of the following selling shareholders has redeemed or transferred all of its units in Host Marriott, L.P. that are covered by this prospectus and have sold the shares of our common stock that they received upon redemption of their units:
Blackstone Real Estate Partners I L.P.
Blackstone Real Estate Partners Two L.P.
Blackstone Real Estate Partners Three L.P.
Blackstone Real Estate Partners IV L.P.
Blackstone RE Capital Partners L.P.
Blackstone RE Capital Partners II L.P.
Blackstone RE Offshore Capital Partners L.P.
Blackstone Real Estate Partners II.TE.1 L.P.
Blackstone Real Estate Partners II.TE.2 L.P.
Blackstone Real Estate Partners II.TE.3 L.P.
Blackstone Real Estate Partners II.TE.4 L.P.
Blackstone Real Estate Partners II.TE.5 L.P.
BRE Logan Hotel, Inc.
RTZ Management Corp.
CR/RE L.L.C.
BRE/Ceriale L.L.C.
BRE/Cambridge L.L.C.
HT-Burlingame Limited Partnership
H-OP, LLC
HE-HM, LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch Mortgage Capital Inc.
David Rubenstein
Duke University
Trustees of the University of Pennsylvania
Blackstone Real Estate Partners II L.P.
Gellar & Co.
Golden Eagle Entertainment Corp.
Centaur Partners I LP
Centaur Partners IV LP
As a result, the information in the selling shareholder table, appearing under the heading “Selling Shareholders” in the accompanying prospectus, is amended by replacing that table with the following:
| Name of Selling Shareholder |
Number of Shares of | |
| Blackstone Real Estate Holdings LP |
3,825 | |
| Blackstone Real Estate Holdings II LP |
4,057 | |
| White Oak Land Corp. |
150,000 | |
| Blackstone Real Estate Associates II LP |
38,724 | |
| Blackstone Real Estate Management Associates II LP |
370,597 | |
| BREP II-Related Segregated Trust Fund |
160,626 | |
| Blackstone Real Estate Capital Associates II LP |
6,411 | |
| Blackstone Family Real Estate Partnership LP |
16,279 | |
| Blackstone Family Real Estate Partnership II LP |
59,285 | |
| S.B. Westridge, Inc. |
10,893 | |
| John G. Schreiber |
533,737 | |
| John G. Schreiber 1987 Children’s Trust |
325,097 | |
| Jennifer C. Arch |
15,777 | |
| Heather E. Sannes |
15,777 | |
| Amy D. Schreiber |
15,777 | |
| John G. Schreiber Annual Gift Trust |
172,203 | |
| Third Lero Corporation |
49,300 | |
| Total |
1,948,365 | |
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All information concerning beneficial ownership of shares of common stock offered hereby is obtained from selling shareholders. One of the selling shareholders, John G. Schreiber, served as a director of Host Marriott from 1998 until November 2003 (and currently holds 16,055 shares of our common stock received for his service as a director, which are not being offered hereby). Several other selling shareholders have relationships with Mr. Schreiber as follows:
| • | The John G. Schreiber 1987 Children’s Trust and the John G. Schreiber Annual Gift Trust were both founded by Mr. Schreiber and Mr. Schreiber’s wife serves as trustee; |
| • | S.B. Westridge, Inc. is wholly owned by Mr. Schreiber; |
| • | Jennifer C. Arch, Heather E. Sannes and Amy D. Schreiber are children of Mr. Schreiber; and |
| • | Mr. Schreiber is also, directly or through an affiliate, a special limited partner of Blackstone Real Estate Associates L.P. and Blackstone Real Estate Associates II L.P. (collectively, BREA), which together are the general partner of certain Blackstone Funds that are listed above as having sold all their shares of our common stock as well as the general partner of Blackstone Real Estate Holdings II LP, one of the remaining selling shareholders. In his capacity as a special limited partner of BREA, Mr. Schreiber is entitled to exercise certain approval rights with respect to, among other things, acquisition, disposition and financing transactions by the Blackstone Real Estate Holdings II LP. |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The consolidated financial statements and schedule of Host Marriott Corporation as of December 31, 2004 and 2003 and for each of the years in the three-year period ended December 31, 2004, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2004 incorporated by reference herein, have been audited by KPMG LLP, independent registered public accounting firm, as stated in their reports incorporated by reference herein.
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PROSPECTUS
47,713,875 Shares
Host Marriott Corporation
Common Stock
The persons or entities listed herein, who may become shareholders of Host Marriott Corporation, may offer and sell from time to time up to 47,713,875 shares of our common stock under this prospectus. We refer to such persons or entities as the selling shareholders. We may issue the offered shares to the selling shareholders if and to the extent that such selling shareholders redeem their units of limited partnership interest in Host Marriott, L.P. and we choose to issue to them our common stock in exchange for their partnership units. We are registering the offered shares as required under the terms of a registration rights agreement between the selling shareholders and us. Fifty percent of the offered shares (23,856,938 shares) become eligible for sale commencing on or after July 1, 1999; twenty five percent (11,928,469 shares) become eligible for sale commencing on or after October 1, 1999; and the remaining twenty five percent (11,928,468 shares) become eligible for sale commencing on or after January 1, 2000. Our registration of the offered shares does not mean that any of the selling shareholders will offer or sell any of the offered shares. We will receive no proceeds of any sales of the offered shares by the selling shareholders, but we will incur expenses in connection with the offering.
The selling shareholders may sell the offered shares in public or private transactions, on or off the New York Stock Exchange, at prevailing market prices or at privately negotiated prices. The selling shareholders may sell the offered shares directly or through agents or broker-dealers acting as principal or agent, or in a distribution by underwriters.
Our common stock is listed on the New York Stock Exchange under the symbol “HMT.”
Neither the Securities and Exchange Commission nor any state securities commission has approved of these offered shares, or determined if this prospectus is truthful or complete. It is illegal for any person to tell you otherwise.
The date of this prospectus is July 2, 1999.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we filed with the Commission under the Securities Act of 1933. This prospectus and any accompanying prospectus supplement do not contain all of the information included in the registration statement. For further information, we refer you to the registration statement, including its exhibits. Statements contained in this prospectus and any accompanying prospectus supplement about the provisions or contents of any agreement or other document are not necessarily complete. If the Commission’s rules and regulations require that such agreement or document be filed as an exhibit to the registration statement, please see such agreement or document for a complete description of these matters. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of each document.
This prospectus provides you with a general description of the offered shares. Each time a selling shareholder sells any of the offered shares, the selling shareholder will provide you with this prospectus and a prospectus supplement, if applicable, that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change any information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described under the heading “Where You Can Find More Information.”
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the Commission. You may read and copy materials that we have filed with the Commission, including the registration statement, at the following Commission public reference rooms:
| 450 Fifth Street, N.W. | 7 World Trade Center | 500 West Madison Street | ||
| Room 1024 |
Suite 1300 | Suite 1400 | ||
| Washington, D.C. 20549 |
New York, New York 10048 | Chicago, Illinois 60661 |
Please call the Commission at 1-800-SEC-0330 for further information on the public reference rooms.
Our Commission filings can also be read at the following address:
New York Stock Exchange 20 Broad Street New York, New York 10005
Our Commission filings are also available to the public on the Commission’s Web Site at http://www.sec.gov.
The Commission allows us to “incorporate by reference” the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the Commission will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until all of the offered securities to which this prospectus relates have been sold or the offering is otherwise terminated.
| 1. | Annual Report on Form 10-K for the fiscal year ended December 31, 1998 (filed on March 26, 1999). |
| 2. | Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (filed on May 10, 1999). |
| 3. | Current Report on Form 8-K (filed on May 3, 1999). |
| 4. | Description of our common stock included in a Registration Statement on Form 8-A filed on November 18, 1998 (as amended on December 28, 1998). |
| 5. | Description of our Rights included in a Registration Statement on Form 8-A filed on December 11, 1998 (as amended on December 24, 1998). |
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You may request a copy of these filings, at no cost, by writing us at the following address or telephoning us at (301) 380-2070 between the hours of 9:00 a.m. and 4:00 p.m., Eastern Time:
Corporate Secretary
Host Marriott Corporation
10400 Fernwood Road
Bethesda, Maryland 20817
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. In addition to historical information, this prospectus and other materials filed or to be filed by us with the Commission and incorporated by reference in this prospectus contain or will contain forward-looking statements within the meaning of the federal securities laws, including the cautionary statements incorporated by reference from our Annual Report on Form 10-K for the year ended December 31, 1998 under the caption “Risk Factors” and other similar statements contained elsewhere in the Form 10-K. Forward-looking statements include information relating to our intent, belief or current expectations, primarily, but not exclusively, with respect to:
| · | economic outlook; |
| · | capital expenditures; |
| · | cost reductions; |
| · | cash flow; |
| · | operating performance; |
| · | financing activities; |
| · | our tax status; or |
| · | related industry developments, including trends affecting our business, financial condition and results of operations. |
We intend to identify forward-looking statements in this prospectus and other materials filed or to be filed by us with the Commission and incorporated by reference in this prospectus by using words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may be,” “objective,” “plan,” “predict,” “project” and “will be” and similar words or phrases, or the negatives thereof or other similar variations thereof or comparable terminology.
All forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual transactions, results, performance or achievements to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include the following factors that could affect such forward-looking statements:
| · | national and local economic and business conditions that will, among other things, affect demand for hotels and other properties, the level of rates and occupancy that can be achieved by such properties and the availability and terms of financing; |
| · | the ability to maintain the properties in a first-class manner, including meeting capital expenditure requirements; |
| · | our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; |
| · | our ability to acquire or develop additional properties and the risk that potential acquisitions or developments may not perform in accordance with expectations; |
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| · | changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; |
| · | governmental approvals, actions and initiatives including the need for compliance with environmental and safety requirements, and changes in laws and regulations or the interpretation thereof; |
| · | the effects of tax legislative action, including the possible enactment of the Real Estate Investment Trust Modernization Act of 1999; and |
| · | our ability to satisfy the complex rules in order to qualify for taxation as a REIT for federal income tax purposes and to operate effectively within the limitations imposed by these rules. |
Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give you no assurance that such expectations will be attained or that any deviations will not be material. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.
As used herein and in any accompanying prospectus supplement, “Host Marriott,” “Company,” “our,” “us” or “we” refer to Host Marriott Corporation, a Maryland corporation, and one or more of our subsidiaries, including Host Marriott, L.P., a Delaware limited partnership, and all the predecessors, or, as the context may require, Host Marriott Corporation only or Host Marriott, L.P. only. All references to Host Delaware shall mean our predecessor, Host Marriott Corporation, a Delaware corporation.
THE COMPANY
Host Marriott was formed to continue and expand the hotel lodging property ownership business of its predecessors. Host Marriott succeeded to this business as a result of its merger with Host Marriott Corporation, a Delaware corporation, and other restructuring transactions consummated in December 1998 which we refer to as the “REIT conversion.” Host Marriott is one of the largest owners of hotels in the world, with ownership of, or controlling interests in, approximately 124 upscale and luxury full-service hotel lodging properties in its portfolio as of June 30, 1999. Virtually all of these properties are leased to subsidiaries of Crestline Capital Corporation, a Maryland corporation and formerly a wholly owned subsidiary of Host Marriott, and are generally operated under the Marriott and Ritz-Carlton brand names and managed by Marriott International, Inc. Host Marriott will make an election to be taxed as a REIT for federal income tax purposes effective for its taxable year beginning January 1, 1999. Host Marriott owns substantially all of its assets and conducts substantially all of its business through Host Marriott, L.P. and its subsidiaries. Host Marriott is the sole general partner of Host Marriott, L.P.
Our principal executive offices are located at 10400 Fernwood Road, Bethesda, Maryland 20817-1109, and our telephone number is (301) 380-9000.
NO PROCEEDS TO THE COMPANY
We will not receive any of the proceeds from sales of the offered shares by the selling shareholders. We will pay all costs and expenses incurred in connection with the offering of the offered shares, other than any brokerage fees and commissions, fees and disbursements of legal counsel for the selling shareholders and share transfer and other taxes attributable to the sale of the common stock, which will be paid by the selling shareholders.
SELLING SHAREHOLDERS
The selling shareholders hold 47,713,875 units of limited partnership interest in Host Marriott, L.P. which they acquired on December 30, 1998 in exchange for properties and assets. We may issue the offered shares to the selling shareholders if and to the extent that they redeem their partnership units and we elect to issue to them shares of our common stock in exchange. The following table provides the name of each selling shareholder and the number of shares of common stock that may be issued to and offered by each selling shareholder. As of June 30, 1999, none of the selling shareholders owns any shares of common stock. All the offered shares offered by a selling shareholder represent shares of common stock that may be issued by us upon the redemption of the selling shareholder’s partnership units. The offered shares, if issued, will become eligible for sale pursuant to the following schedule: fifty percent (50%), or 23,856,938 shares, will become eligible for sale commencing on or after July 1, 1999; twenty five percent (25%), or
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11,928,469 shares, will become eligible for sale commencing on or after October 1, 1999; and the remaining twenty five percent (25%), or 11,928,468 shares, will become eligible for sale commencing on or after January 1, 2000. Since the selling shareholders may sell all, some or none of the offered shares, no estimate can be made of the number of offered shares that will be sold by the selling shareholders or that will be owned by the selling shareholders upon completion of the offering. The offered shares represent approximately 21% of the total shares of common stock outstanding as of June 30, 1999, assuming redemption of all outstanding partnership units for shares of common stock.
| Name of Selling Shareholder | Number of Shares of Common Stock Offered Hereby | |
| Blackstone Real Estate Partners I L.P. |
4,356,783 | |
| Blackstone Real Estate Partners Two L.P. |
285,679 | |
| Blackstone Real Estate Partners Three L.P. |
2,771,544 | |
| Blackstone Real Estate Partners IV L.P. |
87,134 | |
| Blackstone RE Capital Partners L.P. |
454,392 | |
| Blackstone RE Capital Partners II L.P. |
49,873 | |
| Blackstone RE Offshore Capital Partners L.P. |
87,732 | |
| Blackstone Real Estate Holdings L.P. |
2,394,697 | |
| Blackstone Real Estate Partners II L.P. |
13,315,506 | |
| Blackstone Real Estate Holdings II L.P. |
3,737,981 | |
| Blackstone Real Estate Partners II.TE.1 L.P. |
11,204,854 | |
| Blackstone Real Estate Partners II.TE.2 L.P. |
484,448 | |
| Blackstone Real Estate Partners II.TE.3 L.P. |
2,303,484 | |
| Blackstone Real Estate Partners II.TE.4 L.P. |
468,555 | |
| Blackstone Real Estate Partners II.TE.5 L.P. |
985,554 | |
| BRE Logan Hotel, Inc. |
31,957 | |
| RTZ Management Corp. |
14 | |
| CR/RE L.L.C. |
27,078 | |
| BRE/Ceriale L.L.C. |
468,470 | |
| BRE/Cambridge L.L.C. |
263,025 | |
| HT-Burlingame Limited Partnership |
1,414,277 | |
| H-OP, LLC |
729,523 | |
| HE-HM, LLC |
578,051 | |
| Merrill Lynch, Pierce, Fenner & Smith Incorporated |
448,926 | |
| Merrill Lynch Mortgage Capital Inc. |
484,179 | |
| White Oak Land Corp. |
247,786 | |
| David Rubenstein |
30,057 | |
| Duke University |
1,883 | |
| Trustees of the University of Pennsylvania |
433 | |
| Total |
47,713,875 | |
PLAN OF DISTRIBUTION
Any of the selling shareholders may from time to time, in one or more transactions, sell all or a portion of the offered shares on the New York Stock Exchange, in the over-the-counter market, on any other national securities exchange on which the common stock is listed or traded, in negotiated transactions, in underwritten transactions or otherwise, at prices then prevailing or related to the then current market price or at negotiated prices. The offering price of the offered shares from time to time will be determined by the selling shareholders and, at the time of such determination, may be higher or lower than the market price of the common stock on the New York Stock Exchange. In connection with an underwritten offering, underwriters or agents may receive compensation in the form of discounts, concessions or commissions from a selling shareholder or from purchasers of the offered shares for whom they may act as agents, and underwriters may sell the offered shares to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. The offered shares may be sold directly or through broker-dealers acting as principal or agent, or pursuant to a distribution by one or more underwriters on a firm commitment or best-efforts basis. The methods by which the offered shares may be sold include:
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| · | a block trade in which a broker-dealer will attempt to sell the offered shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its account pursuant to this prospectus; |
| · | ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
| · | an exchange distribution in accordance with the rules of the New York Stock Exchange; |
| · | privately negotiated transactions; and |
| · | underwritten transactions. |
The selling shareholders and any underwriters, dealers or agents participating in the distribution of the offered shares may be deemed to be “underwriters” within the meaning of the Securities Act, and any profit on the sale of the offered shares by the selling shareholders and any commissions received by an such broker-dealers may be deemed to be underwriting commissions under the Securities Act.
When a selling shareholder elects to make a particular offer of the offered shares, this prospectus and a prospectus supplement, if required, will be distributed which will identify any underwriters, dealers or agents and any discounts, commissions and other terms constituting compensation from such selling shareholder and any other required information. In order to comply with the securities laws of certain states, if applicable, the offered shares may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the offered shares may not be sold unless they have been registered or qualified for sale in such state or an exemption from such registration or qualification requirement is available and is complied with. We have agreed to pay all costs and expenses incurred in connection with the registration under the Securities Act of the offered shares, including, without limitation, all registration and filing fees, printing expenses and fees and disbursements of our counsel and accountants. The selling shareholders will pay any brokerage fees and commissions, fees and disbursements of legal counsel for the selling shareholders and stock transfer and other taxes attributable to the sale of the offered shares. Under agreements that may be entered into by us, underwriters, dealers and agents who participate in the distribution of the offered shares, and their respective directors, trustees, officers, partners, agents, employees and affiliates, may be entitled to indemnification by us against specified liabilities, including liabilities, losses, claims, damages and expenses and any actions or proceedings arising under the securities laws in connection with this offering, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. We also have agreed to indemnify each of the selling shareholders and each person who controls (within the meaning of the Securities Act) such selling shareholder, and their respective directors, trustees, officers, partners, agents, employees and affiliates, against specified losses, claims, damages, liabilities and expenses and any actions or proceedings arising under the securities laws in connection with this offering. Each of the selling shareholders has agreed to indemnify us, each person who controls us (within the meaning of the Securities Act), underwriters, dealers and agents, and each of our and their directors, trustees, officers, partners, agents, employees and affiliates, against specified losses, claims, damages, liabilities and expenses arising and any actions or proceedings under the securities laws in connection with this offering with respect to written information furnished to us by such selling shareholder; provided, however, that the indemnification obligation is several, not joint, as to each selling shareholder.
EXPERTS
The consolidated financial statements and schedule appearing in our Annual Report on Form 10-K for the year ended December 31, 1998, incorporated by reference in this prospectus and elsewhere in the registration statement, have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in giving said report.
LEGAL MATTERS
The validity of the offered shares will be passed upon for us by Hogan & Hartson L.L.P., Washington, D.C. If any portion of the offered shares is distributed in an underwritten offering or through agents, certain legal matters may be passed upon for any agents or underwriters by counsel for such agents or underwriters identified in the applicable prospectus supplement.
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