Innkeepers USA Trust Acquires Bulfinch Hotel in BostonInnkeepers USA Trust acquires Bulfich Hotel at 107 Merrimac Street in the
November 16 2005 - 8:00AM
Business Wire
Innkeepers USA Trust (NYSE: KPA), a hotel real estate investment
trust (REIT) and a leading owner of upscale extended-stay hotel
properties throughout the United States, today announced that it
has acquired the 80-room Bulfinch Hotel in downtown Boston for
$19.6 million, or $245,000 per key. The acquisition was funded by
borrowing on the company's unsecured line of credit. The hotel was
opened in late 2004 following a complete renovation and three-story
addition to an existing triangular industrial building built in
1904. The building is modeled after the historic Flatiron building
in New York. The hotel interior was designed by renowned architect
and interior designer, Campion Platt, designer of New York's
MercBar and The Park Avalon. "We continue to look for well-located,
quality assets in high-barrier-to-entry markets with significant
upside potential at attractive, competitive pricing," said Jeffrey
H. Fisher, chief executive officer and president. "This upscale,
urban, boutique property certainly fits that criteria, and with a
like-new product and our experienced operator, the hotel is well
positioned to achieve greater market penetration than its peer
group in and around the Downtown Boston market." Located at 107
Merrimac St. in the historic Bulfinch Triangle neighborhood of
downtown Boston, the property is proximate to the city's major
attractions, businesses and shopping, including the Fleet Center,
Quincy Market, Faneuil Hall, Government Center, the financial
district and MassGeneral Hospital. "The Bulfinch Triangle area is
one of the first of many significant redevelopments in the downtown
core following the recent opening of the area's Central Artery,"
Fisher added. "Several other factors also are expected to have a
positive impact on lodging demand in Boston, including a
significant expansion of Logan International Airport and a new 1.6
million square foot Convention Center, which already is scheduled
to host 24 citywide conventions in 2006, a significant increase
over recent periods." Originally constructed in 1904 as a six-story
triangular, industrial building, the Bulfinch Hotel underwent a
full renovation and expansion in December 2004 when three stories
were added. The renovation combined leading-edge design together
with unique architectural features like oversized windows and
different size guest rooms to create a contemporary style and a
refined residential atmosphere. The property's on-site restaurant,
The Angus Steakhouse, is a leased operation. "This well-located,
one-of-a-kind asset with a unique and significant architectural
design and identity, sits within a growing and re-gentrifying area
that has not been widely marketed. We are confident that we can use
that unique identity to help this 80-room hotel realize its full
potential and successfully position it as an independent,
non-branded property." Peter M. Willis, Innkeeper's vice president
of acquisitions and business development, noted that the company
continues to have an aggressive appetite for hotel acquisitions,
including upscale extended stay and premium limited service brands,
the core of the company's portfolio; selected full-service
properties; and turn-around opportunities and hotels that are
affiliated with, or have the potential to be converted to, the
industry's top brands. Innkeepers Hospitality Management, Inc. will
manage the property. Jeffrey H. Fisher, chief executive officer and
president of Innkeepers USA Trust, owns Innkeepers Hospitality
Management. Innkeepers USA Trust owns 70 hotels with a total of
8,825 suites or rooms in 20 states and Washington, D.C., and
focuses on acquiring and/or developing premium branded upscale
extended-stay, select-service and full-service hotels and the
rebranding and repositioning of other hotel properties. For more
information about Innkeepers USA Trust, visit the company's web
site at www.innkeepersusa.com. This press release, and other
publicly available information on the Company, includes forward
looking statements within the meaning of securities law. These
statements include terms such as "should", "may", "believe" and
"estimate", or assumptions, estimates or forecasts about future
hotel and Company performance and results, and the Company's future
need for capital. Such statements should not be relied on because
they involve risks that could cause actual results to differ
materially from the Company's expectations when such statements are
made. Some of these risks are set forth in reports filed from time
to time with the SEC and include, without limitation, (i) the
operational risks of the hotel business (including decreasing hotel
revenues and increasing hotel expenses) under the company's taxable
REIT subsidiary structure, (ii) risks that war, terrorism or
similar activities, widespread health alerts, disruption in oil
imports or higher oil prices or changes in domestic or
international political environments negatively affect the travel
industry and the company, (iii) risk of declines in the performance
and prospects of businesses and industries (e.g., technology,
automotive, aerospace, pharmaceuticals) that are important hotel
demand generators in the company's key markets (e.g. the Silicon
Valley, CA, Washington, DC, etc.), (iv) risk that poor, declining
and/or uncertain international, national, regional and/or local
economic conditions will, among other things, negatively affect
demand for the company's hotel rooms and the availability and terms
of financing, (v) risk that the company's ability to maintain its
properties in competitive condition becomes prohibitively
expensive, (vi) risk that pricing in the hotel acquisition market
becomes prohibitively expensive or non-financeable and that
potential acquisitions or developments do not perform in accordance
with expectations, (vii) risk that the Company may invest in hotels
of a size or nature (e.g., upscale full service or resort)
different than those it has focused on historically (e.g., upscale
extended-stay, and mid-scale limited service); (viii) risks related
to an increasing focus on development, including permitting risks,
increasing the proportion of Company assets not producing revenue
at a given time and risks that projects cost more, take longer to
complete or do not perform as anticipated; (ix) changes in travel
patterns or the prevailing means of commerce (i.e., e-commerce) may
reduce demand for hotels in general or the Company's hotels in
particular, (x) the complex tax rules that the company must satisfy
to qualify as a REIT and the potentially severe consequences of
failing to satisfy such requirements, and (xi) governmental
regulation that may increase the company's cost of doing business
or otherwise negatively effect its business or its attractiveness
as an investment and create risk of liability for non-compliance
(e.g., changes in laws affecting taxes or dividends, compliance
with the Americans with Disabilities Act, workers compensation law
changes, the Sarbanes-Oxley law, etc.).
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