Apple hospitality REITs move forward with mega merger

Combined company will own 191 hotels in 33 states
August 13, 2013 09:30AM

A group of real estate investment trusts under the Apple REIT umbrella will merge to form one of the country’s largest hospitality REITs, Law360 reported.

Apple REIT Seven, Apple REIT Eight and Apple REIT Nine will merge, in two separate transactions, pending shareholder approval, the companies announced last week. The combined REIT will own 191 hotels with 23,711 guest rooms in 33 states, Glade Knight, chairman and CEO of each of the companies, said in a statement.

The mergers are likely part of an exit strategy for Apple, according to Law360. Apple raised much of the REITs’ funds between 2003 and 2007, a period in which nontraded REITs were raising funds easily.

Investors generally have a window of approximately 10 years in which to cash out of a REIT, so the market is currently seeing many exits, through mergers, listings or sales, according to Blue Vault Partners, a REIT research firm. Indeed, nontraded REITs worth an estimated $38 billion are currently looking to exit the market, Blue Vault told Law360. [Law360]  – Hiten Samtani