Business Context and Reporting Period
This Form 8-K is filed by Apple REIT Nine, Inc. (the "Company") for the reporting period ending September 24, 2008. The filing reports the completion of the acquisition of three hotel properties through indirect wholly-owned subsidiaries.
Key Financial Metrics and Transaction Details
The Company acquired three hotels with a combined total of 355 rooms for an aggregate purchase price of $40,950,000. The transaction details are as follows:
| Location | Franchise | Rooms | Purchase Price | Closing Date |
|---|---|---|---|---|
| Charlotte, North Carolina | Homewood Suites | 112 | $5,750,000 | September 24, 2008 |
| Santa Clarita, California | Courtyard | 140 | $22,700,000 | September 24, 2008 |
| Allen, Texas | Hampton Inn & Suites | 103 | $12,500,000 | September 26, 2008 |
| Total | - | 355 | $40,950,000 | - |
The purchase price was funded by the Company's ongoing offering of Units, where each Unit consists of one common share and one Series A preferred share. The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity metrics for the Company or the acquired assets.
Material Changes and Prior Period Comparison
This filing represents a material change in the Company's asset base due to the acquisition of the three hotels. The Allen, Texas property represents the first closing under a series of purchase contracts executed on August 1, 2008, for the potential purchase of five hotels. The Santa Clarita and Charlotte properties were previously disclosed in Form 8-K filings dated July 24, 2008, and August 1, 2008, respectively. No comparative financial data for prior periods is included in this document.
Outlook, Risks, and Contingencies
Regarding the series of purchase contracts for five hotels executed on August 1, 2008, the Company states there can be no assurance that any further closings will occur for the remaining four hotels. Financial statements of the acquired businesses and pro forma financial information are not included in this filing but will be filed as necessary by amendment within the required time period.
Key Facts for Investor Verification
- Verify the funding source: The $40.95 million acquisition was funded via the ongoing offering of Units (common and Series A preferred shares).
- Confirm the status of the remaining four hotels under the August 1, 2008 purchase contracts, as the filing explicitly states no assurance of future closings.
- Monitor upcoming amendments for the financial statements of the acquired businesses and pro forma financial information, which are not yet available.
- Note that the sellers have no material relationship with the Company other than through the purchase contracts.