SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES AND EXCHANGE ACT of 1934
Date of Report (Date of Earliest Event Reported)
December 30, 1997
INNKEEPERS USA TRUST
(Exact name of registrant as specified in its charter)
Maryland 0-24568 65-0503831
(State or other (Commission File No.) I.R.S. Employer
jurisdiction Identification No.)
of incorporation)
306 Royal Poinciana Way
Palm Beach, Florida 33480
(Address of principal executive offices)
(561) 835-1800
(Registrant's telephone number, including area code)
N/A
(former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 15, 1998, a partnership subsidiary of Innkeepers USA
Limited Partnership, a Virginia limited partnership (collectively
with its subsidiary partnerships, the "Partnership"), of which
Innkeepers Financial Corporation, a wholly owned subsidiary of
Innkeepers USA Trust (the "Registrant"), serves as sole general
partner, consummated the acquisitions of the following Residence
Inn hotels (collectively, the "Northwest Hotels"):
Residence Inn - Bellevue, Washington 120 rooms
Residence Inn - Lynnwood, Washington 120 rooms
Residence Inn - Tukwila, Washington 144 rooms
Residence Inn - Vancouver, Washington 120 rooms
Residence Inn - Portland, Oregon 112 rooms
616 rooms
The Partnership acquired the Northwest Hotels in a negotiated
transaction from Bellevue Hotel Associates Limited Partnership,
Lynnwood Hotel Associates Limited Partnership, Tukwila Hotel
Associates Limited Partnership, Vancouver Hotel Associates
Limited Partnership and Portland Hotel Associates Limited
Partnership, for cash purchase prices aggregating $84 million.
Approximately $60 million of the total purchase price was funded
by the Partnership's assumption of an existing loan from an
affiliate of Lehman Brothers secured by the Northwest Hotels, and
the balance was funded with borrowings under the Partnership's
existing line of credit with an affiliate of Nomura Asset Capital
Corporation.
The Northwest Hotels are leased by the Partnership to JF Hotel,
Inc., which, together with other corporations with identical
ownership (collectively, the "Lessee"), lease all of the
Partnership's hotels. The Lessee is owned by Mr. Jeffrey H.
Fisher, Chairman, President and Chief Operating Officer of the
Registrant, and Mr. Frederic M. Shaw, Executive Vice President
and Chief Operating Officer of the Registrant. The Lessee leases
each of the Northwest Hotels pursuant to percentage leases which
provide for rent equal to the greater of (I) fixed base rent or
(ii) percentage rent based on room revenues of the hotel. The
percentage leases for the Northwest Hotels each have initial
terms of thirteen years. The base rent under the percentage
leases on each of the Northwest Hotels is as set forth below. The
percentage rent for the Northwest Hotels is 30% of room revenue
up to the "threshold" amounts set forth below (which are subject
to any final adjustment agreed upon by the parties), plus 68% of
room revenue in excess of the threshold. The Northwest Hotels
will continue to be operated as hotel properties, and will be
operated under the Residence Inn by Marriott brand pursuant to
franchise agreements between the Lessee and Marriott
International, Inc.
HOTEL BASE RENT THRESHOLD
Bellevue $1,935,733 $1,950,000
Lynnwood $1,451,436 $1,950,000
Tukwila $2,003,999 $2,150,000
Vancouver $1,346,856 $1,750,000
Portland $1,266,899 $1,725,000
ITEM 5. OTHER
A. On December 30, 1997, the Partnership consummated the
acquisition of the following Residence Inn hotels (collectively,
the "Managed Hotels"):
Residence Inn - Columbus East, Ohio 80 rooms
Residence Inn - Indianapolis, Indiana 88 rooms
Residence Inn - Ft. Wayne, Indiana 80 rooms
Residence Inn - Lexington, Kentucky 80 rooms
Residence Inn - Louisville, Kentucky 96 rooms
Residence Inn - Ontario, California 200 rooms
Residence Inn - Altamonte Springs, Florida 128 rooms
Residence Inn - Winston-Salem, North Carolina 88 rooms
840 rooms
The Partnership acquired the Managed Hotels from an unaffiliated
seller in a negotiated transaction for a cash purchase price of
$59.5 million. The purchase price was funded by the Partnership
with borrowings under its existing line of credit.
The Managed Hotels are leased by the Partnership to the Lessee
pursuant to leases providing for rent equal to the greater of (I)
fixed base rent or (ii) percentage rent based on room revenues of
the hotel. The percentage leases for the Managed Hotels each
have initial terms of thirteen years. The base rent under the
percentage leases on each of the Managed Hotels is as set forth
below. The percentage rent for the Managed Hotels is 30% of room
revenue up to the "threshold" amounts set forth below (which are
subject to any final adjustment agreed upon by the parties),
plus 68% of room revenue in excess of the threshold. The Managed
Hotels will continue to be operated as hotel properties.
HOTEL BASE RENT THRESHOLD
Columbus East, OH $ 463,409 $1,703,000
Indianapolis, IN $ 482,843 $1,859,000
Ft. Wayne, IN $ 445,236 $1,222,000
Lexington, KY $ 643,659 $1,465,000
Louisville, KY $ 922,791 $1,505,000
Ontario, CA $1,234,333 $2,935,000
Altamonte Springs, FL $1,092,681 $2,465,000
Winston-Salem, NC $ 583,801 $1,821,000
The Managed Hotels will continue to be managed by Residence Inn
by Marriott, Inc., an affiliate of Marriott International, Inc.,
under management agreements with the Lessee providing for the
payment of base and incentive management fees and a "system" fee
(and associated fees and costs) related to the right for the
Managed Hotels to operate under the Residence Inn by Marriott
brand.
B. On January 9, 1998, the Partnership consummated the
acquisition of the Residence Inn - Bothell, WA (the "Bothell
Hotel") from an unaffiliated seller for a cash purchase price of
$11.75 million. The purchase price was funded with borrowings
under the Partnership's existing line of credit. The Bothell
Hotel is leased by the Partnership to the Lessee pursuant to a
percentage lease providing for rent equal to the greater of (I)
fixed base rent or (ii) percentage rent based on room revenues of
the hotel. The percentage lease for the Bothell Hotel has an
initial term of thirteen years. The base rent under the
percentage lease on the Bothell Hotel is $1,086,000. The
percentage rent for the Bothell Hotel is 30% of room revenue up
to $1,840,172 (which is subject to any final adjustment agreed
upon by the parties), plus 68% of room revenue in excess of
$1,840,172. The Bothell Hotel will continue to be operated as a
hotel property, and will be operated under the Residence Inn by
Marriott brand pursuant to a franchise agreement between the
Lessee and Marriott International, Inc.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
Pursuant to Rule 3-05 of Regulation S-X, no financial
statements or pro forma information are required to be filed with
this report.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
INNKEEPERS USA TRUST
January 21, 1998 /s/ Gregory M. Fay
Gregory M. Fay
Vice President of Accounting
