MHI Hospitality
Corporation , announced today that it has entered into a contract to
acquire the Hilton Jacksonville Riverfront in Jacksonville, Florida for an
aggregate price of $22.0 million.
The Hilton Jacksonville is a 292-room property that overlooks the St.
John’s River and includes two restaurants, highlighted by a Ruth’s Chris
Steak House, 12,000 square feet of meeting space, a fitness center and
outdoor pool. Additionally, an 80-foot charter boat, the Jacksonville
Princess Yacht, is available for private and public cruises.

“The Hilton Jacksonville represents an excellent opportunity for MHI to
utilize the proceeds raised in the company’s initial public offering and
from the underwriter’s exercise of the over-allotment option earlier this
year,” commented Andrew Sims, MHI Hospitality Corporation’s chief
executive officer. “This is a performing asset in an attractive market and
has the potential to provide positive returns to our shareholders.” The
property will be managed by MHI Hotels Services LLC, which currently
manages the company’s six existing hotels and has managed the Hilton
Jacksonville since 1996.

The purchase price will be funded in part by an $18 million first mortgage
loan. An affiliate of the seller, the AFL-CIO Building Investment Trust,
has agreed to provide the mortgage financing subject to certain conditions
precedent. An affiliate of MHI Hotels Services currently leases the hotel,
and will contribute certain personal property and assign contract and
other rights relating to the property to MHI Hospitality in exchange for
operating partnership units valued at approximately $913,000. The
remaining portion of the purchase price will be paid in cash utilizing a
portion of the proceeds from the company’s initial public offering.
Following the acquisition, the company will pursue a $3.0 million capital
improvement program for the hotel.
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