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Apple REIT Ten Inks $13.5 million Contract for Purchase of New Build Hotel
in North Charleston, South Carolina

By John McDermott, The Post and Courier, Charleston, S.C.McClatchy-Tribune Regional News

March 21, 2011--A cash-flush company with Apple in its name is eyeing the West Montague Avenue corridor in North Charleston. But it's not the Silicon Valley marketing machine behind the recent iPad 2 launch.

Apple REIT Ten Inc. of Richmond, Va., said it has inked a $13.5 million contract to buy a hotel that's to be built at a later date by a North Carolina developer on a 1.7-acre site at West Montague Avenue and Calvin Street.

It's one of several lodging plays that newly formed Apple REIT Ten has committed to recently. Another involves the purchase of a 91-room TownePlace Suites in Columbia for $10.5 million, or about $115,000 a key.

Apple REIT Ten, one of several variants on the Apple name led by real estate investment trust veteran Glade M. Knight, recently raised $90 million from investors, according to a filing with the Securities and Exchange Commission. It plans to use the money to buy hotels, apartment buildings and other income-producing properties.

The site of the future West Montague project is owned by The Generation Cos., a Durham, N.C.-based builder and operator of extended-stay lodging properties. It paid $950,000 for the land last year, and it has received a $100,000 deposit for the proposed 122-room Home2 Suites by Hilton from Knight.

The new Home2 concept is described as "a hip extended-stay hotel experience."

Apple REIT Ten noted it could not make any assurances that the North Charleston hotel purchase, valued at roughly $110,700 per guest room, will ever come to fruition.

Dialed up

After playing hard to get, the parent of one of Charleston's largest radio broadcasters has succumbed to the buyout overtures of an industry rival.

Atlanta-based Cumulus Media Inc. has hammered out a deal to buy Citadel Broadcasting Corp. in a transaction valued at about $2.4 billion. The sale is set to close by the end of the year if approved by regulators.

The marriage will create a national broadcasting behemoth with 572 stations across 120 U.S. markets, including Charleston, the Midlands and the Grand Strand. The combination is expected to yield sizable cost savings. "We'll have the national scope and financial strength necessary to make critical investments in content and technology necessary to compete in today's rapidly evolving media landscape," said Lew Dickey, CEO of Cumulus.

Las Vegas-based Citadel, which has about 4,000 employees, rejected an unsolicited $2.1 billion buyout bid from Cumulus late last year. The two entered into exclusive talks in February after the terms were sweetened.

"In some of the old media, consolidation is the only way they're going to preserve the economics of the business model for a while," Craig Moffett, an analyst at Sanford C. Bernstein & Co., told "Bloomberg Surveillance" after the deal was announced this month.

Citadel owns nine South Carolina stations, including four in the Charleston area: WIWF: 96.9 The Wolf Country; WSSX 95SX Hit Music Now; WTMA-AM 1250 The Big Talker; and WWWZ Z93 JAMZ. It also handles the day-to-day operations at WMGL Magic 107.5 for the license-holder. Its other S.C. stations are in Columbia. Cumulus doesn't compete for listeners head on with Citadel in the Palmetto State. The Georgia company has a dozen outlets targeting the Myrtle Beach and Florence areas.

Reach John McDermott at 937-5572.


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Copyright (c) 2011, The Post and Courier, Charleston, S.C.

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