RICHMOND, VA-Apple REIT Ten plans to invest $100 million in an asset class that is decidedly outside of the four main real estate food groups: oil and gas.
That said, oil and gas is a sector that isn't too far afield from commercial real estate investment activity, and indeed, as recent trends show, the industry is pushing hard to expand the definition of real estate anyway.
The REIT invested in an LLC called Cripple Creek Energy that was formed to acquire, develop and dispose of oil and gas leasehold acreage as well as oil, gas and other minerals.
CCE does not currently have any material assets, according to the regulatory filing the REIT has made, however it holds options to acquire mineral rights and will use the proceeds from Apple REIT's investment to exercise these options and develop the leasehold acreage.
The Apple REIT family of companies have a broad array of interests – successful interests as the recent sale of Apple REIT Six to BRE Select Hotels Corp, an affiliate of Blackstone Real Estate Partners VII, earlier this year for $1.2 billion is any indication. Apple REIT Ten, for instance, also has a number of hotel holdings.
Nor is oil and gas a new area for the Apple REIT companies. As RichmondBizSense points out, last year Apple REIT Nine sold natural gas fields in Texas for $198 million after having leased it to Chesapeake Energy for several years.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
