|GERMANTOWN, Tenn - October 10, 2006 - Equity Inns, Inc.
(NYSE: ENN), the third largest hotel real estate investment trust (REIT),
today announced that the Company has signed a contract to purchase four
Kentucky hotels with a total of 429 rooms from Musselman Hotels, LLC for
$53.8 million. The purchase price represents a capitalization rate of approximately
10% based upon trailing twelve-month net operating income and includes
the assumption of $27 million of existing debt. Musselman Hotels will retain
management under a three year, performance based management contract.
The four properties include three hotels in the Lexington metropolitan
area: a six-year old, 90-room Courtyard by Marriott in suburban Hamburg,
a two-year old, 91-room Residence Inn also located in Hamburg and a two-year
old, 108-suite SpringHill Suites-Downtown, which was named “SpringHill
of the Year” at the 2006 Marriott franchise owner’s conference. The fourth
property is a six-year old, 140-room Courtyard by Marriott in downtown
Louisville, one block from the recently expanded Kentucky Convention Center.
The Louisville purchase also includes a 250-space parking garage adjacent
to the property that serves the hotel and the many surrounding businesses
and attractions in the downtown area.
Mr. Howard Silver, President and CEO, commented, “This transaction creates significant value for our shareholders in a number of ways. First, the purchase price for these well-located assets is attractive and immediately accretive. With an average age of four years and with strong upscale brands, this purchase continues our strategy of acquiring younger, premium branded hotels for our portfolio. We also believe that establishing a relationship with the Musselman Group, a top-tier hotel developer and operator, will provide us access to additional quality acquisition opportunities over time.”
The Company expects to close the transaction by the end of the fourth quarter of this year.
Certain matters discussed in this press release which are not historical facts are “forward-looking statements” within the meaning of the federal securities laws and involve risks and uncertainties.
About Equity Inns
Equity Inns, Inc.
|Also See:||Reynolds Development and Musselman Hotels Developing a 250 room Westin Hotel Near the Philip Morris USA Headquarters in Richmond, Virginia / September 2006|
|Musselman Hotels Opens the 150-suite Embassy Suites Hotel Louisville-East / Oct 2002|