A wholly owned subsidiary of CNL Hospitality will pay RFS $383 million in cash ($12.35 per share) and assume total debt of $304.6 million. The deal is the largest in the history of fast-rising, five-year-old CNL Hospitality and will make the firm the fifth largest hospitality REIT in the United States, based on assets and number of hotels, Hutchison says.

"This transaction enables us, in one step, to further our position as one of the nation's largest and most diversified lodging REITs, with a presence in all regions of the country; an attractive mix of hotels in urban centers and resort destinations; as well as strong relationships with the industry's leading operating brands," says Hutchison.

When the deal is done, CNL will have an estimated 24,271 rooms at 120 hotels in 47 states. Leading brands under which RFS hotels operate include Sheraton, Residence Inn by Marriott, Hilton, Doubletree, Holiday Inn, Hampton Inn, Homewood Suites by Hilton and TownePlace Suites by Marriott.