Equity Inns Buying Five Hotels for $35M

GERMANTOWN, TN-Equity Inns Inc., a locally based hotel REIT, has contracted to purchase five Marriott-branded hotels from McKibbon Hotel Group Inc. a hotel development and management company. Based in Gainsville, GA. The hotels are located in Georgia, North Carolina and Tennessee. The purchase price was $35.6 million.

The purchase includes two Courtyards and three Residence Inns. The Courtyards include a 78-room hotel in Asheville, NC and a 105-room hotel in Athens, GA, for $12.7 million. The Residence Inns include a 76-suite hotel in Chattanooga, TN, a 78- suite hotel in Knoxville, TN and a 66-suite hotel in Savannah, GA, for $22.9 million. The average age of these five properties is approximately seven years. The transaction was executed at an average cap rate of 10% on a trailing twelve-month cash flow basis.

As part of the acquisition, McKibbon Hotel Management, Inc. will continue to manage the hotels with incentive-based management contracts. McKibbon currently manages 37 hotels in seven states, primarily Marriott Courtyards and Residence Inns. The transaction is expected to close during the second quarter of 2004.