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Equity Inns Acquiring Four Hotels for $26M

GERMANTOWN, TN-The hotels--three Hampton Inns and one Spring Hill Suites--are five years old on average and have a combined 376 rooms. Equity Inns chief executive Howard Silver tells GlobeSt.com the company has been averaging a 10% cap rate on the 31 hotels it has acquired over the past 18 months.

By Brian K. Miller | Updated on August 23, 2005

GERMANTOWN, TN-Locally headquartered Equity Inns Inc. is under contract to acquire 376 rooms in four hotels in Michigan and Illinois from partnerships controlled by hotel developer Hospitality Specialists Inc. The sale price is $25.9 million or $69,000 per room. The transaction is expected to close this quarter.

The deal includes two hotels in Grand Rapids, MI–one a Hampton Inn and the other a Spring Hill Suites–and two Hampton Inns, one in East Lansing, MI, and the other in Champaign/Urbana, IL. The average age of the four hotels is five years and the average cap rate is approximately 9.7% based on the properties’ trailing 12-month net operating income.

Equity Inns chief executive Howard Silver tells GlobeSt.com the company has been averaging a 10% cap rate on the 31 hotels it has acquired over the past 18 months. The seemingly lofty return on investment is due to how AMB works with the seller, he says, which includes not using brokers.

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