Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate investment trust (REIT), today announced that the Company has signed agreements to purchase five Marriott branded hotels for a total price of $114.2 million from partnership's controlled by the principals of Huntington Hotels. The properties are being purchased at an average capitalization rate of 8.6% based upon trailing twelve months net operating income. The proposed purchase includes the assumption of $56.5 million debt at a blended cost of 6.1%. Huntington Hotels, which currently manages the Carlsbad Courtyard in San Diego for Equity Inns, will retain management of the properties under performance based contracts.
The five properties, with an average age of seven years, include a 150-suite Residence Inn at the Los Angeles International Airport; a 95-suite Residence Inn and 137-suite SpringHill Suites in San Diego; a 184-room Courtyard and 116-room Fairfield Inn & Suites located directly across from the Dallas Market Center. Upon closing, the purchase will extend Equity Inns' investment in the Southern California and Dallas metropolitan areas.
Mr. Howard A. Silver, President and Chief Executive Officer, commented, 'We are pleased to build on our relationship with Huntington Hotel Group, a strong manager with an active development pipeline of premium, select service projects. Additionally, we are excited about increasing our presence in the high barrier markets of Los Angeles and San Diego.'