Apple REIT closes another take-out deal

RICHMOND, Virginia – Apple Hospitality REIT announced the opening and acquisition of the 260-room Motto by Hilton Nashville Downtown for approximately $98.2 million, or $378,000 per key. Apple signed the fixed-price development take-out deal with the developer Mortenson in May 2023.

R.W. Baird analyst Michael Bellisario noted that since 2017, Apple REIT has acquired nine properties (including three dual-branded properties and Nashville) that were fixed-price development take-out deals for an aggregate cost basis of approximately $460 million. Apple has two other development take-out deals in the queue – Anchorage and Las Vegas – that are projected to open in 4Q27 and 2Q28, respectively.

Bellisario also wrote that since Apple REIT agreed to the deal more than two-and-a-half years ago, top-line performance in Nashville has been weaker than expected, following national trends. “Apple has noted that its historical development deals have generated yields on cost in the HSD%-LDD% range; as such, we believe the Nashville deal will produce returns at/near the lower-end of the historical range. We continue to assume Hotel EBITDA contribution of $5.0 million in 2026E (~5% yield on cost) and $6.7 million in 2027E (~7% yield); we assume 2028E will be the stabilized year.”

At the same time, Apple said in its press release announcing the deal that according to data provided by STR for the trailing 12 months ended October 31, 2025, RevPAR for the Nashville CBD/Downtown submarket was approximately $211, approximately 110% above industry RevPAR and approximately 79% above the company’s RevPAR for the same period.

“The overarching demand trends in Nashville continue to be strong, with resilient leisure demand supported by a wealth of entertainment and sporting venues and strengthening business demand bolstered by the continued movement of both large and small corporates into Nashville’s business-friendly environment,” said Nelson Knight, president, Real Estate and Investments of Apple Hospitality. “This acquisition represents a new, complementary brand for our existing rooms-focused portfolio, and we are confident its appeal will further enhance its ideal location just a few blocks off Broadway and our ability to drive strong operating performance over the long term.”

Last month, Apple Hospitality REIT reported a year-over-year RevPAR loss for the third quarter and reduced its RevPAR guidance for the rest of the year, while also announcing two pending asset sales and two fixed-price development deals as part of its earnings statement.

Following this latest acquisition, the Apple Hospitality hotel portfolio includes 217 hotels with 29,580 guest rooms geographically diversified throughout 37 states and the District of Columbia.  The portfolio consists of 96 Marriott-branded hotels, 115 Hilton-branded hotels, five Hyatt-branded hotels and one independent hotel.