Humphrey Hospitality Trust, Inc. (Nasdaq: HUMP) today announced its closing on the purchase of five Super 8 Hotels, strengthening its current presence in Iowa and Illinois with the addition of four hotels in Iowa and one in Illinois. For the purchase of the portfolio the company issued approximately 376,000 in Preferred Operating Partnership Units, approximately $171,000 in cash and assumed approximately $3.2 million in debt in a transaction totaling approximately $7.1 million.
Paul Schulte, Chairman of the Board, commented “These hotels represent our first acquisition since the merger and are the first portfolio acquired by utilizing preferred operating partnership units. The issuance of convertible operating partnership units to acquire hotels provides benefits to both the company and the sellers. By contributing their hotels to our company in exchange for preferred operating partnership units, sellers achieve the benefits of diversifying their risk by becoming part of a much larger group of 92 hotels. The transaction also permits the sellers to defer any taxable gain and earn competitive dividends through ownership of the operating partnership units. The company, by issuing units, benefits by conserving cash and continuing to grow through acquisitions. The company intends to continue to examine additional growth opportunities by acquiring hotels through the issuance of operating partnership units.
Humphrey Hospitality Trust, Inc. is a self-advised real estate investment trust specializing in limited-service lodging. The Company owns 92 hotels in 19 midwestern and eastern states. More information on Humphrey Hospitality can be found at www.humphreyhospitality.com.
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These risks are discussed in the Company’s filings with the Securities and Exchange Commission.