Company officials did indicate that the sale price represents a cap rate of approximately 4.5% based on the property's trailing 12 months net operating income, and that the proceeds will be used to pay down part of the company's unsecured line of credit.
"After exploring several different alternatives for this independent hotel, we determined that it was in our best interests to divest the property," says Jeffrey H. Fisher, president and CEO of Innkeepers. "It was an excellent investment, generating a 14% annual return since we acquired the property 10 years ago.
"As we had previously announced during our Q4 conference call and earnings release, we will seek to divest certain hotels from our portfolio in 2007," says Fisher, whose company currently owns 74 hotels with 9,808 rooms and a 49% interest in a 355-room hotel. "It is a continuation of our long-term strategy to transform the overall quality of our portfolio by redeploying capital into newer, more profitable assets with long-term growth potential."
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