Business Context and Reporting Period
Company: Apple REIT Nine, Inc. (a subsidiary of Apple Hospitality REIT, Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: August 31, 2010
Event: Completion of acquisition of three hotel properties.
Key Financial Metrics and Transaction Details
The Company acquired three Hampton Inn hotels for a total purchase price of $42,730,000. The transaction involved assuming existing debt secured by the properties.
| Hotel Location | Rooms | Purchase Price | Assumed Debt | Interest Rate | Maturity Date |
|---|---|---|---|---|---|
| Rogers, Arkansas | 122 | $9,600,000 | $8,336,824 | 5.20% | 9/1/2015 |
| St. Louis, Missouri | 190 | $23,000,000 | $13,914,689 | 5.30% | 9/1/2015 |
| Kansas City, Missouri | 122 | $10,130,000 | $6,517,413 | 5.45% | 10/1/2015 |
| TOTAL | 434 | $42,730,000 | $28,768,926 | - | - |
Liquidity and Funding: The equity portion of the purchase price (Purchase Price less Assumed Debt) was funded through the Company's ongoing offering of Units (one common share and one Series A preferred share). The filing does not provide specific revenue, profit, or cash flow metrics for the acquired assets in this document.
Material Changes and Prior Period Comparison
This filing represents the closing of three assets under a series of purchase contracts executed on March 16, 2010, for the potential purchase of seven hotels. The sellers are related through common ownership, and the Company has previously purchased other hotels within this same group. No comparative financial performance data (e.g., year-over-year revenue or profit changes) is provided in this specific filing.
Guidance, Outlook, and Risks
- Management Commentary: The Company confirmed the closing of the assets and noted that the sellers have no material relationship with the Company other than through the purchase contracts.
- Financial Statements: Specific financial statements and pro forma information for these hotels are not included in this text but are incorporated by reference from a Form 8-K/A filed on June 29, 2010.
- Risks/Contingencies: The filing notes that all loans assumed provide for monthly payments of principal and interest on an amortized basis. No specific risk factors or contingencies are detailed in this excerpt.
Key Facts for Investor Verification
- Verify the pro forma financial impact of these acquisitions by reviewing the Form 8-K/A filed on June 29, 2010, as referenced in Item 9.01.
- Confirm the total capital raised via the Unit offering to cover the equity portion of the $42.73 million purchase price.
- Review the status of the remaining four hotels from the original March 16, 2010, contract for seven hotels to understand the full scope of the acquisition strategy.
- Validate the interest rate environment and refinancing risks associated with the assumed debt maturing in 2015.