This past year was marked by tremendous portfolio growth for Apple REIT Nine, Inc. With a focus on the
protection of shareholder principal, the distribution of the highest possible returns and the appreciation of our
assets over time, we closed on the purchase of 21 Marriott
- or Hilton
- branded hotels with 2,478 guestrooms in
11 states and identified numerous other real estate opportunities. The current national economic downturn
has created what I believe is an excellent buying environment for Apple REIT Nine. The strength of our 2008
accomplishments and purchases, our overall capital structure, the expertise of our team and the unique acquisition
opportunities currently in the marketplace provide us with an optimistic outlook for 2009.
The Apple REIT Nine best-efforts offering began on April 25, 2008, and as of our February closing we had raised
total gross proceeds of $532 million towards our fundraising goal of $2 billion. The strength of our funding resources
paired with the limited number of buyers in the 2008 marketplace provided a variety of unique purchasing
opportunities and we believe will continue to provide an advantage as we pursue new acquisitions in 2009.
Our ability to fund our purchases primarily on an all-cash basis virtually eliminates our need to search for and
manage debt, allowing us to efficiently close on our purchase transactions and devote our time to ensuring the
proficient operation of our assets.
Guided by our steadfast commitment to protecting shareholder principal and growing the value of your investment
over time, our acquisition strategy is quite simple. We acquire attractive real estate primarily on an all-cash
basis. To date, our purchases include extended-stay and limited-service Marriott
- or Hilton
-branded hotels in
stable or growing markets. A complete listing of our 2008 acquisitions can be found on subsequent pages of
this report. Our alignment with the Marriott
and Hilton
families of brands provides each of our hotels with
the benefit of world renowned brand recognition. The Marriott
and Hilton
brands that Apple REIT Nine is
aligned with continue to excel in the marketplace as leaders in their market segments, receiving numerous industry
awards and accolades. From
magazine’s “100 Best Companies to Work For” to
Travel + Leisure
“Green/Eco Hotel,” Marriott
continued to grab headlines in 2008 as a world-renowned hospitality icon.
, also an acclaimed hotelier, in 2008, was once again recognized by J.D. Power and Associates and received
numerous awards from the Hospitality Sales and Marketing Association International.
With the majority of our acquisitions occurring in the fourth quarter of 2008, the following performance measures
do not reflect a full year of operations. For the period of ownership, our average occupancy rate was 59 percent,
average daily rate was $110 and revenue per available room (RevPAR) was $65. These rates are comparable
with industry and brand averages for the short period of our ownership. In 2008, the Company achieved funds
from operations (FFO) of $4.4 million, or $0.28 per share.
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