Business Context and Reporting Period
This Form 8-K was filed by Apple REIT Nine, Inc. on September 25, 2009, reporting the completion of an asset acquisition. The registrant is a Virginia corporation focused on hotel real estate investments.
Key Financial Metrics and Transaction Details
- Asset Acquired: Sunbelt – CJT, LLC, which owns a newly constructed 90-room Courtyard by Marriott hotel in Johnson City, Tennessee.
- Purchase Price: $9,879,788.
- Funding Source: Proceeds from the Company's ongoing offering of Units (consisting of one common share and one Series A preferred share).
- Operational Status: The hotel opened on September 24, 2009, one day prior to the closing.
Material Changes and Related Agreements
This transaction represents the fourth closing under a series of purchase contracts executed on October 20, 2008, for the potential acquisition of six hotels. Two additional hotels remain under contract, though the filing states there can be no assurance that further closings will occur.
Outlook, Risks, and Management Commentary
Management notes that the seller has no material relationship with the Company other than through the purchase contracts. The primary risk highlighted is the uncertainty regarding the completion of the remaining two hotel acquisitions under the 2008 contracts.
Key Facts for Investor Verification
- Verify the total capital raised through the Unit offering to confirm sufficient liquidity for the remaining two potential hotel acquisitions.
- Review the specific terms of the October 20, 2008 purchase contracts to understand conditions precedent for the remaining closings.
- Confirm the occupancy and revenue performance of the newly opened Johnson City property in subsequent reporting periods.