GERMANTOWN, TN— Hotel REIT Equity Inns, Inc. has entered into an agreement to purchase four hotels from the McKibbon Hotel Group, a hotel developer and management company, for $28.5 million, including the assumption of $13 million of debt. The hotels are in addition to the nine hotels that Equity Inns acquired from the McKibbon Hotel Group earlier in 2004. Equity Inns will acquire two Marriott Courtyards located in Knoxville, TN and Mobile, AL, as well as a Residence Inn in Macon, GA and a Springhill Suites in Asheville, NC. The four hotels will collectively add 322 rooms to the company’s hotel portfolio and have an average age of seven years. The properties will continue to be managed by McKibbon Hotel Management, Inc. for at least three years under a performance based management contract. The transaction, expected to close by the end of the first quarter 2005, was executed at an average cap rate of 10.3% on a trailing 12-month cash flow basis. Equity Inns estimates that the impact of the hotels will be positive to its 2005 funds from operations (FFO).
