Equity Inns Sells Two Older Midscale Hotels
August 28 2006 - 7:00AM
Business Wire
Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate
investment trust (REIT), today announced the sale of two older
hotels. In two separate transactions, the Company sold a 19-year
old, 130-room Hampton located in the Dallas suburb of Richardson,
Texas and a 37-year old, 159-room exterior corridor Holiday Inn
located in Winston Salem, North Carolina. The Hampton Inn and
Holiday Inn were sold for approximately $5.0 million and $2.6
million, respectively, representing a capitalization rate of
approximately 6.3% and 2.0%, respectively, based upon the
property's trailing twelve months net operating income. The sale of
these hotels represents Equity Inns' continued focus on divesting
of older properties with limited remaining franchise life and
recycling the capital received into newer, higher growth potential
assets, which results in a younger portfolio with an increased
franchise life. Since the beginning of 2004, the Company has sold
13 hotels with an average life of nineteen years at an average
capitalization rate of approximately 6.0%. The Company expects to
sell only a few additional older hotels that remain in the
portfolio. The sale of these two hotels combined with the sale of
the two hotels previously announced on August 17th is not expected
to have a material impact on the Company's earnings. Forward
Looking Statements 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. 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 result 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.
Capitalization Rate The Company uses a measure common in the hotel
industry to 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). 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.
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