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PALM BEACH-Innkeepers USA Trust reported FFO for the third quarter increased from $23.2 million to $26.2 million, a 12% gain over the same period last year. Total revenue for the hotel REIT rose to $31.2 million, up from $28.1 million in Q3 1999, a 12% improvement. Net income amounted to $18.2 million (46 cents per diluted share) compared to $15.1 million (37 cents per diluted share) for the third quarter of 1999.

An increase in revenue per available room of 8.7%, to $92.11, up from $84.71, was responsible for the increase in FFO. The increase was balanced between a rise in the average daily rate of 5.3% and an increase in occupancy of 3.2%.

CEO and president Jeff Fisher notes that, “Our record results during the third quarter were fueled solely by strong internal growth. Once again our Silicon Valley properties led the way, reporting average RevPAR growth of 19.5%.

The firm, which operates 67 extended-stay hotels, continues to sell non-strategic properties, about 10% of its portfolio, and adding hotels in markets with high barriers to entry and strong underlying demand growth. Its 121-room Residence Inn in Tysons Corner, scheduled to open early next year, is being partially funded by the sale of its Comfort Inn in Allentown, PA for about $6.5 million. The balance of the funding will come from borrowing on its $130 million unsecured line of credit. Total development costs should amount to approximately $14 million.

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