MHI Acquires the Louisville Ramada Riverfront Inn
Approximately $7.6 mil, or $41,000 per room
WILLIAMSBURG, VA, Setember 25, 2006. MHI Hospitality Corporation (Amex: MDH), announced today that it has completed the acquisition of the 186-room Louisville Ramada Riverfront Inn, located in Jeffersonville, Indiana for approximately $7.6 million, or $41,000 per unit. The hotel is located directly on the Ohio River, with unimpeded views of the Louisville skyline, and easy access to the center of downtown Louisville.
The purchase was structured to meet the requirements of a 1031 like-kind exchange, enabling the company to defer all capital gains on the sale in August of its Williamsburg property. To facilitate the closing of the acquisition, MHI accessed approximately $7.5 million from its line of credit, and approximately $200,000 in cash proceeds from the sale of its Williamsburg property.
This acquisition represents the company's first deep turn opportunity since its initial public offering. The company initially planned to have the property remain open during renovations; however management has decided that due to the scope of the project, the property will be closed through its completion. The restaurants in the adjacent building will remain open during the renovation stage. MHI expects the rebranded hotel to re-open in the third quarter 2007.
Andrew M. Sims, the president and CEO of the company stated, "We are pleased to close the acquisition of the Ramada Riverfront. Once our extensive renovations are completed, we believe that this repositioned and upbranded asset will be very competitive as the only upscale property in the growing Jeffersonville sub-market, across from Louisville on the Ohio riverfront. The area is benefiting from the introduction of several new businesses and light industrial parks."
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