Equity Inns (NYSE:ENN)
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Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate
investment trust (REIT), announced today that the Company executed an
agreement to purchase the 104-room SpringHill Suites by Marriott and the
122-room Hilton Garden Inn in the Austin, Texas suburb of Round Rock for
a total of $16.3 million, or $72,000 per key from partnerships
controlled by LinGate Hospitality. The total purchase price equates to
an average cap rate of 9.7%, based upon trailing twelve months net
operating income.
The hotels, which are six years old and not encumbered with any existing
debt, are well located to a variety of major demand sources including
Dell Computer’s World Headquarters. The hotels
will continue to be managed by LinGate Hospitality under a performance
based contract.
Mr. Howard A. Silver, President and Chief Executive Officer commented, “We
continue to purchase younger upscale hotels in good locations with
multiple demand drivers. Our ability to acquire each of the hotels at a
meaningful discount to estimated replacement cost contributes to the
ongoing value creation we have produced for our shareholders.
Additionally, we are pleased to be furthering our relationship with
LinGate Hospitality.”
About Equity Inns
Equity Inns, Inc. is a self-advised REIT that focuses on the upscale
extended stay, all-suite and midscale limited-service segments of the
hotel industry. The Company, which ranks as the third largest hotel REIT
based on number of hotels, currently owns 125 hotels with 14,924 rooms
located in 35 states. For more information about Equity Inns, visit the
Company's Web site at www.equityinns.com.
Non-GAAP Financial Measures
Included in this press release is the term Capitalization Rate, a
"non-GAAP financial measure", common in the hotel industry, used by the
Company to help discuss its underwriting of acquired or disposed hotel
assets. Capitalization rate, for this discussion, is defined as the
percentage derived by dividing the net operating income of the hotel
asset(s), less a management fee and an allowance for recurring capital
expenditures, by the purchase price paid or received for the hotel
asset(s).
Forward Looking Statements
Certain matters discussed in this press release which are not historical
fact are “forward-looking statements”
within the meaning of the federal securities laws and involve risks and
uncertainties. The words “may,”
“plan,” “project,”
“anticipate,” “believe,”
“estimate,” “forecast,”
‘expect,” “intend,”
“will,” and
similar terms are intended to identify forward-looking statements, which
include, without limitation, statements concerning our outlook for the
hotel industry, acquisition and disposition plans for our hotels and
assumptions and forecasts of future results for fiscal year 2006.
Forward-looking statements are not guarantees of future performance and
involve numerous risks and uncertainties which may cause our actual
financial condition, results of operations and performance to be
materially different from the results of expectations expressed or
implied by such statements. General economic conditions, future acts of
terrorism or war, risks associated with the hotel and hospitality
business, the availability of capital, risks associated with our debt
financing, hotel operating risks and numerous other factors, may affect
our future results and performance and achievements. These risks and
uncertainties are described in greater detail in our 2005 Annual Report
on Form 10-K filed on March 15, 2006, and our other periodic filings
with the United States Securities and Exchange Commission (SEC). We
undertake no obligation and do not intend to publicly update or revise
any forward-looking statement, whether as a results of new information,
future events or otherwise. Although we believe our current expectations
to be based upon reasonable assumptions, we can give no assurance that
our expectations will be attained or that actual results will not differ
materially.