CNL Hospitality Buys RFS in $687M Deal

ORLANDO-Sensing “a compelling strategic opportunity,” Thomas J. Hutchison III, CEO of Orlando-based CNL Hospitality Properties Inc., says the REIT has contracted to buy the 8,271-room, 57-property RFS Hotel Investors Inc. of Memphis in a cash-debt deal valued at $687.6 million. The transaction is expected to close in the third quarter.

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.