Apple Hospitality REIT Acquires the Embassy Suites by Hilton Madison Downtown
Apple Hospitality REIT (NYSE: APLE) announced the acquisition of the Embassy Suites by Hilton Madison Downtown for approximately $79.5 million, equating to $303,000 per key. This newly constructed hotel, located in a prime area of downtown Madison, Wisconsin, expands the company's portfolio and presence in a vibrant market. The acquisition was made through a fixed-price contract, securing a favorable deal amid rising construction costs. The hotel is strategically positioned to cater to both business and leisure travelers. Additionally, Apple Hospitality disclosed the sale of the SpringHill Suites by Marriott Greensboro for $7.1 million and mentioned an upcoming acquisition of a Motto by Hilton in Nashville, expected to be completed by late 2025. Post these transactions, Apple Hospitality's portfolio includes 224 hotels with 30,066 guest rooms across 37 states and the District of Columbia.
- Acquisition of Embassy Suites by Hilton Madison Downtown for $79.5 million, $303,000 per key.
- Newly constructed and strategically located in Madison's downtown area.
- Secured through a fixed-price contract amid rising construction costs.
- Increased presence in Madison, a dynamic and business-friendly market.
- Portfolio growth to 224 hotels with 30,066 guest rooms across 37 states and DC.
- Potential uncertainty regarding the acquisition of the Motto by Hilton in Nashville due to unmet closing conditions.
The acquisition of the Embassy Suites by Hilton Madison Downtown for
RevPAR (Revenue Per Available Room) growth of ~
Moreover, the disposition of the 82-room SpringHill Suites by Marriott Greensboro for
In the short term, the Madison market’s diverse demand generators—from government to biotech and leisure—should support stable occupancy rates and revenue. Long-term, the strategic location in a business-friendly environment adds value, potentially driving higher returns as economic activities grow in the region.
The acquisition and opening of a new hotel in downtown Madison emphasizes Apple Hospitality's strategy of geographical diversification and targeting high-demand markets. Madison is known for its mix of business and leisure demand generators, including proximity to the University of Wisconsin-Madison and several corporate headquarters.
This acquisition aligns with the company's focus on upscale, rooms-focused hotels. The mentioned trailing twelve-month RevPAR improvement of ~
Notably, the fixed-price, take-out contract secured ahead of development suggests prudent financial planning, mitigating risks associated with rising construction costs. This approach can provide a competitive edge in securing high-quality assets at attractive prices, ultimately benefiting investors.
In the bigger picture, the company’s continued portfolio adjustment, including the sale of non-core assets like the SpringHill Suites by Marriott Greensboro, shows a proactive stance in maintaining portfolio quality and alignment with strategic goals.
The Embassy Suites by Hilton Madison Downtown acquisition underscores Apple Hospitality REIT’s commitment to enhancing their portfolio with high-quality properties in strategic locations. Embassy Suites, part of Hilton's premium collection, caters to both business and leisure travelers, which fits well within Madison’s mixed-demand environment.
This hotel’s prime location near the Wisconsin State Capitol, Monona Terrace Community and Convention Center and the University of Wisconsin ensures a steady flow of guests. Proximity to key city attractions and business centers enhances the hotel's marketability and occupancy rates.
For retail investors, understanding the significance of such acquisitions in a diversified REIT portfolio is crucial. Hotels like Embassy Suites typically command higher room rates, contributing positively to overall portfolio revenue. Additionally, the diversification across 37 states provides a buffer against regional economic downturns, ensuring more stable returns.
In summary, the acquisition demonstrates targeted and strategic growth in high-potential markets, likely offering robust returns and enhancing portfolio value over time.
“We are pleased to expand our portfolio with the acquisition of the newly constructed, custom Embassy Suites Madison Downtown and increase our presence within the dynamic and business-friendly
The newly built Embassy Suites Madison Downtown is located at 231 South Pinckney Street,
In addition, the Company today announced the recent disposition of the 82-room SpringHill Suites by Marriott Greensboro in
As previously announced, the Company continues to have one additional hotel under contract for purchase, a Motto by Hilton that is under development in downtown
Following the acquisition of the Embassy Suites Madison Downtown and the disposition of the SpringHill Suites Greensboro, the Apple Hospitality hotel portfolio includes 224 hotels with 30,066 guest rooms geographically diversified throughout 37 states and the
About Apple Hospitality REIT, Inc.
Apple Hospitality REIT, Inc. (NYSE: APLE) is a publicly traded real estate investment trust (“REIT”) that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in
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Such factors include, but are not limited to, the ability of the Company to effectively acquire and dispose of properties and redeploy proceeds; the anticipated timing and frequency of shareholder distributions; the ability of the Company to fund capital obligations; the ability of the Company to successfully integrate pending transactions and implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions (including the potential effects of inflation or a recessionary environment); reduced business and leisure travel due to geopolitical uncertainty, including terrorism and acts of war; travel-related health concerns, including widespread outbreaks of infectious or contagious diseases in the
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Apple Hospitality REIT, Inc.
Kelly
804‐727‐6321
kclarke@applereit.com
Source: Apple Hospitality REIT, Inc.
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