Apple’s acquisitions roll on with Las Vegas SpringHill Suites

Apple Hospitality is continuing its acquisition streak, this time in Las Vegas.

The Richmond, Virginia-based REIT, which has been one of the few REITs active in the deal space over the past year, acquired the 299-key SpringHill Suites by Marriott Las Vegas Convention Center for approximately $75 million ($251,000 per key) from Chicago-based GEM Realty Capital.  

Nelson Knight, president of real estate and investments for Apple Hospitality, said Las Vegas is an attractive market for the REIT. 

“Las Vegas, well known as a premier gaming and entertainment destination, has dynamically expanded in recent years with the arrival of major league sports teams, the Sphere and Formula 1 racing, to capture an even larger segment of leisure travel demand,” Knight said. 

Knight said the property’s proximity to the convention center was also a factor. 

According to Apple, the purchase price is just under a 10.7x multiple on trailing 12-month hotel EBITDA. 

“With a strong recovery in overall demand, positive supply dynamics, the recent development and expansion of large-scale entertainment and convention venues, and the upcoming Super Bowl LVIII, we expect performance for Las Vegas and for this hotel to continue to strengthen,” Knight said.

The hotel opened in October 2009 and is adjacent to the newly expanded Las Vegas Convention Center. The property includes a 0.65-acre surface parking lot that is zoned and master-planned for the future development of up to 500 more rooms. It also includes a seven-story parking garage that, combined with the lot, can accommodate up to 244 spaces.

Crescent Hotels & Resorts currently manages the property.

R.W. Baird Senior Research Analyst Michael Bellisario said Apple’s strong balance sheet allows the company to be a net acquirer and “lean in” when it finds acquisitions it likes. “Las Vegas is a market to which the hotel REITs have been under-allocated historically,” Bellisario said. “Gaming is no longer the sole demand generator and the market’s longer-term growth drivers are favorable, particularly compared to the average U.S. hotel market.”

Other deals under contract for Apple include a 256-key Motto by Hilton in Nashville, Tennessee, for $97 million (it will open in 2025) and a 260-key Embassy Suites by Hilton in Madison, Wisconsin, for $79 million (it is scheduled to open in early 2024.)

Hotel Investment Today talked to Apple Hospitality CEO Justin Knight in December. At the time, he said the REIT is so competitive in the deal space because of the consistency of the hotels it is buying (and the SpringHill Suites purchase fits in that category).

“We have an unparalleled transaction history within a subset of the hotel industry,” said Apple Hospitality CEO Justin Knight. “When you look at ownership in upscale select-service hotels within the Hilton, Marriott and Hyatt brand families, we’ve done hundreds of transactions in that space over two decades.”

In the last few months of 2023, the REIT purchased two hotels in Salt Lake City — a 175-key Courtyard by Marriott Salt Lake City Downtown for approximately $48.1 million and a 159-key Hyatt House Salt Lake City Downtown for $34.3 million. The deal also includes a parking garage for $9.1 million, which the two hotels use. It also closed on a 146-key Residence Inn by Marriott Seattle South/Renton for approximately $55.5 million and a 192-key Embassy Suites by Hilton South Jordan Salt Lake City for approximately $36.8 million.

“[Our] access to capital puts us in a great position to transact, especially around individual assets where often we have direct market experience with similar branded hotels,” Knight said in December.