Business Context and Reporting Period
Company: Apple REIT Nine, Inc. (Apple Hospitality REIT, Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: January 5, 2009
Event: Entry into a Material Definitive Agreement (Item 1.01) for the potential acquisition of a hotel property.
Key Financial Metrics and Transaction Details
| Metric | Value |
|---|---|
| Target Property | Hampton Inn & Suites, Yuma, Arizona (90 guest rooms) |
| Purchase Price | $11,250,000 |
| Assumed Debt Principal | $6,322,393 |
| Debt Interest Rate | 6.20% |
| Debt Maturity | July 2016 |
| Initial Deposit | $200,000 (Refundable during review period) |
| Additional Deposit | $200,000 (Due if review period expires without termination) |
Liquidity and Funding: The filing text does not provide current company-wide revenue, profit, or cash flow metrics. The transaction deposits and potential purchase price are expected to be funded by proceeds from the Company's ongoing offering of Units (one common share and one Series A preferred share).
Material Changes and Transaction Status
This filing represents a potential expansion of the Company's portfolio. As of the report date, the transaction is contingent and not yet closed. The Company has entered a purchase contract with Yuma One Limited Partnership but retains the right to terminate the agreement at any time during the "review" period ending February 4, 2009, for any reason.
Guidance, Risks, and Contingencies
- Closing Conditions: The transaction is subject to several unsatisfied conditions, including seller compliance with covenants, obtaining third-party consents, and the termination of existing management/franchise agreements by the seller and execution of new agreements by the Company.
- Termination Rights: The Company may terminate the contract during the review period with a full refund of the initial deposit. If terminated after the review period but before closing (for reasons other than seller failure), deposits may be forfeited to the seller.
- Uncertainty: There is no assurance that the purchase will close. The Company is currently conducting due diligence on legal, title, environmental, financial, and physical conditions of the property.
Key Facts for Investor Verification
- Verify the status of the "review period" ending February 4, 2009, and whether the Company elected to terminate or proceed.
- Confirm if the required third-party consents and new franchise/management agreements were successfully executed.
- Monitor the Company's ongoing Unit offering to ensure sufficient capital is raised to fund the additional deposit and net purchase price.
- Check for subsequent filings confirming the closing of the Yuma, Arizona acquisition or a formal termination of the contract.