The Apple REIT Companies is considering consolidating four of its five REIT funds into one and taking the combined entity public.
The consolidation would involve Apple REITs Six, Seven, Eight and Nine: 254 hotels, more than 30,000 rooms and $4.1 billion in assets. The four REITs combined produced $208.3 million in revenue and $45.5 million in profit in the second quarter, according to SEC filings.
The Richmond-based REITs said in filings that there is no set timetable for any such transaction.
“At this time, Apple REIT Six, Apple REIT Seven, Apple REIT Eight and Apple REIT Nine are within the initial evaluation stage of a potential consolidation transaction and as such, we are unable to comment outside of our SEC filings,” Apple REIT spokesperson Kelly Clarke said in an email.
This isn’t the first time that there’s been discussion of an Apple REIT going public.
A letter sent this month to investors of Apple REIT Six, the oldest of the company’s funds, said it is considering selling the fund or potentially taking it public. Last December, it hired Eastdil Secured as a financial adviser to help it evaluate its options for Apple REIT Six.
The potential consolidation does not include Apple REIT Ten, the newest of the company’s funds. It is still an open fund and has raised $408 million from investors since it was launched in January. It has acquired 14 hotels through the first half of the year.
The move also comes in the wake of the Apple REITs taking a few punches after federal regulators accused the funds’ broker, David Lerner Associates of New York, of misleading investors when selling shares of Apple REIT Eight.
Questions then arose regarding the true financial state of the REITs and the true value of the funds’ non-publicly traded shares.
The Apple REITs and Lerner have since been hit with several class-action lawsuits from disgruntled investors.
The Apple REITs that might be combined are in the business of buying hotels; the only exception was in 2009, when Apple REIT Nine bought natural gas fields in Texas.
BizSense reported this month that the company recently began working a deal to sell off that land to a utility giant for a substantial profit.
Here’s a breakdown of the numbers of each of the REITs that might be combined:
Fund name No. of hotels owned Q2 revenue Q2 net income
Apple REIT Six 66 $63.7 million $12.8 million
Apple REIT Seven 51 $54.9 million $7.7 million
Apple REIT Eight 51 $51.8 million $4.7 million
Apple REIT Nine 86 $89.7 million $20.3 million
Michael Schwartz is a BizSense reporter. Please send news tips to [email protected].
The Apple REIT Companies is considering consolidating four of its five REIT funds into one and taking the combined entity public.
The consolidation would involve Apple REITs Six, Seven, Eight and Nine: 254 hotels, more than 30,000 rooms and $4.1 billion in assets. The four REITs combined produced $208.3 million in revenue and $45.5 million in profit in the second quarter, according to SEC filings.
The Richmond-based REITs said in filings that there is no set timetable for any such transaction.
“At this time, Apple REIT Six, Apple REIT Seven, Apple REIT Eight and Apple REIT Nine are within the initial evaluation stage of a potential consolidation transaction and as such, we are unable to comment outside of our SEC filings,” Apple REIT spokesperson Kelly Clarke said in an email.
This isn’t the first time that there’s been discussion of an Apple REIT going public.
A letter sent this month to investors of Apple REIT Six, the oldest of the company’s funds, said it is considering selling the fund or potentially taking it public. Last December, it hired Eastdil Secured as a financial adviser to help it evaluate its options for Apple REIT Six.
The potential consolidation does not include Apple REIT Ten, the newest of the company’s funds. It is still an open fund and has raised $408 million from investors since it was launched in January. It has acquired 14 hotels through the first half of the year.
The move also comes in the wake of the Apple REITs taking a few punches after federal regulators accused the funds’ broker, David Lerner Associates of New York, of misleading investors when selling shares of Apple REIT Eight.
Questions then arose regarding the true financial state of the REITs and the true value of the funds’ non-publicly traded shares.
The Apple REITs and Lerner have since been hit with several class-action lawsuits from disgruntled investors.
The Apple REITs that might be combined are in the business of buying hotels; the only exception was in 2009, when Apple REIT Nine bought natural gas fields in Texas.
BizSense reported this month that the company recently began working a deal to sell off that land to a utility giant for a substantial profit.
Here’s a breakdown of the numbers of each of the REITs that might be combined:
Fund name No. of hotels owned Q2 revenue Q2 net income
Apple REIT Six 66 $63.7 million $12.8 million
Apple REIT Seven 51 $54.9 million $7.7 million
Apple REIT Eight 51 $51.8 million $4.7 million
Apple REIT Nine 86 $89.7 million $20.3 million
Michael Schwartz is a BizSense reporter. Please send news tips to [email protected].
HI
I have the Apple REIT 6 and called the rep at D.Lerner to sell. He advised that in July it will go public and I will be better off waiting till then. What are your thoughts?
Thanks
I am in the same perdictiment guess what its May 2012 the only thing done I heard is the gas in Apple 9 got sold which now it will make it easier to put their apples in one basket and go public. Hopefully this is a good thing.
please leave comments
I bought Apple Reit 9 because of the market, not with the intention of poorer performing Reits being lumped into it. How will that work?