Equity Inns, Inc. Buying Five Hotels from McKibbon Hotel Group for $45.5 million
GERMANTOWN, TN, December 19, 2005. Equity Inns, Inc., the third largest hotel real estate investment trust (REIT), announced today that it has entered into an agreement to purchase five Marriott branded hotels containing 435 rooms from partnerships controlled by McKibbon Hotel Group, a hotel developer and management company for a total price of $45.5 million or $105,000 per room. The transaction price includes the assumption of $15.7 million of existing debt with an average coupon rate of 7.8%.
The acquired hotels include 3 hotels in Florida, a Residence Inn in Tampa, a SpringHill Suites in Sarasota, and a Courtyard by Marriott in Orlando. Additionally, the Company will acquire a Residence Inn in Mobile, Alabama, and the Company's first TownePlace Suites hotel, which is located in Savannah, Georgia.
The five hotels are being acquired at an average capitalization rate of approximately 9.7% on a trailing 12-month net operating income basis and have an average age of seven years.
McKibbon Hotel Management, Inc. will continue to manage the properties under similar terms as previously negotiated management agreements.
Howard Silver, President and Chief Executive Officer commented, "We are pleased to expand our presence in Florida and Georgia with these Marriott branded hotels. The hotels complement our strategy of owning properties with multiple demand generators and build upon our momentum of buying newer hotels in the upscale, select service lodging category. Moreover, given the recent escalation in construction related material and labor costs, the portfolio cost per key represents a slight discount to replacement cost."
Mr. Silver added, "While the acquisition does increase our portfolio investment in the Florida market (currently 17% of Equity Inns' assets), we believe any concentration risk is mitigated by the fact that our hotels are dispersed in nine of the state's largest Metropolitan Statistical Areas."
When these transactions are finalized, the Company will own 128 hotels with 15,223 rooms in 36 states.
The Company expects to close on the properties by the end of the first quarter 2006.
Marriott International, Inc. (NASDAQ: MAR) is a global leading lodging company based in Bethesda,Maryland, USA, with more than 4,200 properties in 80 countries and territories. Marriott International reported revenues of nearly $14 billion in fiscal year 2014. The company operates and franchises hotels and licenses vacation ownership resorts under 19 brands, including: The Ritz-Carlton®, BVlgari®, EDITION®, JW Marriott®, Autograph Collection® Hotels, Renaissance® Hotels, Marriott Hotels®, Delta Hotels and Resorts®, Marriott Executive Apartments®, Marriott Vacation Club®, Gaylord Hotels®, AC Hotels by Marriott®, Courtyard®, Residence Inn®, SpringHill Suites®, Fairfield Inn & Suites®, TownePlace Suites®, Protea Hotels® and MoxyHotels®. Marriott has been consistently recognized as a top employer and for its superior business ethics. The company also manages the award-winning guest loyalty program, Marriott Rewards® and The Ritz-Carlton Rewards® program, which together surpass 50 million members. For more information or reservations, please visit our website at 
