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Apple Hospitality (APLE) Expands With Acquisition in Las Vegas
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Apple Hospitality REIT, Inc. (APLE - Free Report) has made headlines with its recent acquisition of the SpringHill Suites by Marriott Las Vegas Convention Center for approximately $75 million, signaling a strategic move to capitalize on the booming hospitality market in Las Vegas. This 299-room property, located at 2989 Paradise Road, Las Vegas, NV, boasts a prime location adjacent to the newly expanded Las Vegas Convention Center, making it a key player in the city's thriving leisure and convention travel scene.
Nelson Knight, the president of Real Estate and Investments of Apple Hospitality, expressed optimism about the acquisition, citing Las Vegas as a dynamic destination that has expanded significantly in recent years. The city's growth, marked by the arrival of major league sports teams and large-scale entertainment venues like the Sphere and Formula 1 racing, has contributed to increased leisure travel demand. Additionally, the hotel's proximity to the bustling Las Vegas Convention Center positions it strategically to benefit from the high demand generated by large-scale events and conventions.
The purchase price of $75 million at approximately $251,000 per key reflects an attractive valuation, with a multiple of just under 10.7X on the trailing 12-month Hotel EBITDA. The acquisition aligns with Apple Hospitality's strategy of investing in properties with strong growth potential, particularly in markets demonstrating positive supply dynamics and a robust recovery in overall demand.
The SpringHill Suites Las Vegas Convention Center, which opened its doors in October 2009, offers premium amenities, including spacious guest rooms, more than 10,000 square feet of flexible indoor and outdoor meeting space, a rooftop pool with stunning views of the Las Vegas Strip and ample parking facilities. The hotel's location, steps away from the iconic Las Vegas Strip and major entertainment venues, further enhances its appeal to both leisure and business travelers.
According to data provided by STR for the trailing 12 months ended Nov 30, 2023, the Las Vegas Strip submarket witnessed a notable improvement of more than 18% in revenue per available room (RevPAR) compared to the same period in 2022. This data reflects the resilience and recovery of the hospitality industry in the region.
Apple Hospitality's portfolio expansion doesn't stop with the Las Vegas acquisition. The company has two additional hotels under contract for purchase, including an Embassy Suites by Hilton in downtown Madison, WI, and a Motto by Hilton in downtown Nashville, TN. These additions are anticipated to further strengthen the company's position in the upscale hotel market, with an expected total purchase price of approximately $78.6 million and $96.7 million, respectively.
With the SpringHill Suites acquisition, Apple Hospitality's portfolio now includes 225 hotels with 29,900 guest rooms spread across 38 states, showcasing the company's commitment to geographic diversification. The portfolio is concentrated on industry-leading brands, including 100 Marriott-branded hotels, 120 Hilton-branded hotels and five Hyatt-branded hotels.
In summary, Apple Hospitality REIT's strategic acquisition in Las Vegas positions the company to capitalize on the city's vibrant hospitality market and reflects its commitment to expanding a diverse portfolio in key markets across the United States. As the company continues to navigate the evolving landscape of the hospitality industry, investors will be watching closely for further developments and the potential impact on Apple Hospitality's financial performance and market presence.
Shares of Apple Hospitality, currently carrying a Zacks Rank #3 (Hold), have soared 11.6% in the past six months, outperforming the industry’s increase of 8.9%.
The Zacks Consensus Estimate for Lamar’s current-year FFO per share has been revised 1.7% upward over the past two months to $7.31.
The Zacks Consensus Estimate for STAG Industrial’s 2023 FFO per share has moved 1.3% upward in the past two months to $2.28.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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Apple Hospitality (APLE) Expands With Acquisition in Las Vegas
Apple Hospitality REIT, Inc. (APLE - Free Report) has made headlines with its recent acquisition of the SpringHill Suites by Marriott Las Vegas Convention Center for approximately $75 million, signaling a strategic move to capitalize on the booming hospitality market in Las Vegas. This 299-room property, located at 2989 Paradise Road, Las Vegas, NV, boasts a prime location adjacent to the newly expanded Las Vegas Convention Center, making it a key player in the city's thriving leisure and convention travel scene.
Nelson Knight, the president of Real Estate and Investments of Apple Hospitality, expressed optimism about the acquisition, citing Las Vegas as a dynamic destination that has expanded significantly in recent years. The city's growth, marked by the arrival of major league sports teams and large-scale entertainment venues like the Sphere and Formula 1 racing, has contributed to increased leisure travel demand. Additionally, the hotel's proximity to the bustling Las Vegas Convention Center positions it strategically to benefit from the high demand generated by large-scale events and conventions.
The purchase price of $75 million at approximately $251,000 per key reflects an attractive valuation, with a multiple of just under 10.7X on the trailing 12-month Hotel EBITDA. The acquisition aligns with Apple Hospitality's strategy of investing in properties with strong growth potential, particularly in markets demonstrating positive supply dynamics and a robust recovery in overall demand.
The SpringHill Suites Las Vegas Convention Center, which opened its doors in October 2009, offers premium amenities, including spacious guest rooms, more than 10,000 square feet of flexible indoor and outdoor meeting space, a rooftop pool with stunning views of the Las Vegas Strip and ample parking facilities. The hotel's location, steps away from the iconic Las Vegas Strip and major entertainment venues, further enhances its appeal to both leisure and business travelers.
According to data provided by STR for the trailing 12 months ended Nov 30, 2023, the Las Vegas Strip submarket witnessed a notable improvement of more than 18% in revenue per available room (RevPAR) compared to the same period in 2022. This data reflects the resilience and recovery of the hospitality industry in the region.
Apple Hospitality's portfolio expansion doesn't stop with the Las Vegas acquisition. The company has two additional hotels under contract for purchase, including an Embassy Suites by Hilton in downtown Madison, WI, and a Motto by Hilton in downtown Nashville, TN. These additions are anticipated to further strengthen the company's position in the upscale hotel market, with an expected total purchase price of approximately $78.6 million and $96.7 million, respectively.
With the SpringHill Suites acquisition, Apple Hospitality's portfolio now includes 225 hotels with 29,900 guest rooms spread across 38 states, showcasing the company's commitment to geographic diversification. The portfolio is concentrated on industry-leading brands, including 100 Marriott-branded hotels, 120 Hilton-branded hotels and five Hyatt-branded hotels.
In summary, Apple Hospitality REIT's strategic acquisition in Las Vegas positions the company to capitalize on the city's vibrant hospitality market and reflects its commitment to expanding a diverse portfolio in key markets across the United States. As the company continues to navigate the evolving landscape of the hospitality industry, investors will be watching closely for further developments and the potential impact on Apple Hospitality's financial performance and market presence.
Shares of Apple Hospitality, currently carrying a Zacks Rank #3 (Hold), have soared 11.6% in the past six months, outperforming the industry’s increase of 8.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Lamar Advertising Company (LAMR - Free Report) and STAG Industrial, Inc. (STAG - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Lamar’s current-year FFO per share has been revised 1.7% upward over the past two months to $7.31.
The Zacks Consensus Estimate for STAG Industrial’s 2023 FFO per share has moved 1.3% upward in the past two months to $2.28.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.