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 The 146-suite Homewood Suites on San Antonio’s Riverwalk Acquired by Innkeepers USA Trust for $21 million

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PALM BEACH, Fla., May 3, 2004 — Innkeepers USA Trust (NYSE: KPA), a hotel real estate investment trust (REIT) and a leading owner of upscale, extended-stay hotel properties throughout the United States, today announced that it had agreed to 
acquire the 146-suite Homewood Suites by Hilton (NYSE: HLT) hotel on San Antonio’s famed Riverwalk for $21 million to be funded with available cash.  It is the REIT’s first property in San Antonio and represents an expansion of the company’s acquisition strategy as the hotel industry shows signs of sustainable recovery.

The only all-suite property located directly on the Riverwalk, San Antonio’s most popular tourist attraction, the unique hotel is housed in the fully renovated, landmark San Antonio Drug Company building, constructed in 1919 and listed on the 


Homewood Suites Riverwalk
432 W. Market St.
San Antonio, Texas
National Directory of Historic Places.  San Antonio is among the top 10 U.S. cities for overnight leisure travel.  Situated in the heart of downtown, the hotel is within 500 yards of the city’s newly renovated convention center, which hosts 300 to 400 events each year, is less than a mile away from the Alamodome and the Alamo and is about eight miles from the airport.

“Now that the hotel industry is entering its long-awaited recovery, we are ramping up our acquisition program,” said Jeffrey H. Fisher, Innkeepers chief executive officer and president.   “We have been disciplined and are well positioned to take advantage of the growing number of properties that are coming to market.  We are seeing acquisition candidates coming to market that are more in line with our pricing expectations, and we intend to be a meaningful buyer.”

Fisher noted that the San Antonio property was the REIT’s first Homewood Suites acquisition.  “We have wanted to add the Homewood Suites brand, Hilton’s upscale, extended-stay product, to our portfolio for some time.  The brand reached critical mass several years ago and has become a major force in the segment.  We look forward to the opportunity to expand our relationship with Hilton and other leading brands.”

Peter M. Willis, Innkeeper’s vice president of business development, said that while upscale extended-stay and premium limited service brands will remain the core of the company’s portfolio, the company plans to broaden the REIT’s mix with selected full-service properties, turn-around opportunities and hotels that are affiliated with, or have the potential to be converted to, the industry’s top brands.  “We have a strong appetite for deals and are reaching out to owners and the brokerage community.” 
The company expects to close on this acquisition in May 2004, subject to certain customary conditions. 

Innkeepers USA Trust is a hotel real estate investment trust (REIT) and a leading owner of upscale, extended-stay hotel properties throughout the United States.  The company owns 66 hotels with a total of 8,185 suites or rooms in 21 states and focuses on acquiring and/or developing Residence Inns by Marriott and other upscale extended-stay hotels and the rebranding and repositioning of other hotel properties. 

Cautionary statements set forth in reports filed by the company from time to time with the Securities and Exchange Commission discuss important factors impacting, or that could impact, the company and its results or forecasted results. 


 
 
Contact:

David Bulger
EVP, CFO and Treasurer
(561) 227-1302
www.innkeepersusa.com

Also See: The Homewood Suites by Hilton, The Woodlands Achieves Highest Guest Satisfaction in the Hilton System / Feb 2003
Sam Friedman, President of Dimension Development Named Developer of the Year by Hilton's Homewood Suites Brand / Mar 2001


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