American HotelIncome Properties REIT LP reached a deal to buy a portfolio of fourMarriott-branded, select-service hotels in the U.S. for $47.0 million.
The company is purchasing the properties at aweighted-average capitalization rate of approximately 9.0% on trailing 12months NOI. The transaction is expected to be immediately accretive to AFFO perunit.
The price excludes closing and post-acquisition adjustmentsand does not include $2.8 million for the completion of brand-mandatedproperty-improvement plans.
The hotels total 374 rooms and are located in Jacksonvilleand Lake City, Fla., and Chattanooga, Tenn. The properties include a 109-roomResidence Inn, two 89-room Fairfield Inn & Suites and an 87-room TownePlaceSuites.
American Hotel Income CEO Rob O'Neill said in a release thatthe transaction is in line with the company's strategy of owning high-quality,branded, select-service hotels in robust secondary markets. The portfolio willincrease the percentage of Marriott-branded hotel rooms to more than 40% of thecompany's branded portfolio.
American Hotel Income used cash on hand from the that it conducted inJuly and a new CMBS loan to fund the transaction. The new 10-year mortgage isexpected to have a fixed interest rate of under 4.50%.
The company expects to close this acquisition in lateOctober or early November.
The hotels will be managed by American Hotel Income's hotelmanager, Tower Rock Hotels & Resorts Inc., a subsidiary of O'Neill Hotels& Resorts Ltd.