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Innkeepers Takes Hotels in $215M Transaction

PALM BEACH, FL-RLJ Urban Lodging Fund, LP sells the four Southern California properties. The 931-room deal equals $231,000 per room.

By Melissa Kress | Updated on July 27, 2006

PALM BEACH, FL-Innkeepers USA Trust is making its entrance into the San Diego market with a four-hotel acquisition deal with RLJ Urban Lodging Fund, LP. The $215-million deal gives the locally based hotel REIT ownership of 931 rooms in Southern California.

The $213,000-per-room transaction consists of the Residence Inn San Diego, with 192 rooms; Residence Inn Anaheim, with 200 rooms; Hilton Suites Anaheim, with 230 rooms; and the Hilton Ontario, with 309 rooms. The Bethesda, MD-based seller is an affiliate of RLJ Development, LLC.

“We seek to acquire quality properties in markets with high barriers to new competition. Southern California is a great market that we believe will continue to perform well,” an Innkeepers CFO Dennis Craven tells GlobeSt.com. “We have a lot of experience with Residence Inns, which is one of our favorite brands as evidence by our being a large franchisor, and the two Residence Inn hotels are top-quality assets. An additional external growth strategy is to selectively acquire upscale premium branded full service assets in markets that we believe have substantial upside potential. The two Hiltons fit that strategy well and is a reason why we liked this portfolio.”

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