ACCOR North America Exercises Purchase Option on Six Phoenix-Area Hotels

VIZZDA—September 18^th, 2012—Gregg Toon, Treasurer of ACCOR North America, has exercised a purchase option on six Phoenix-area hotels currently leased and operated by Motel 6. The sale is the Arizona portion of a broader disposition by the Herrick Company including 38 similar hotel properties in California, Illinois, Indiana, New Mexico, New York and Oregon, 23 retail bank branches in Indiana and Kentucky, 27 distribution centers, a corporate headquarters in Illinois and an 181k ft² hospital in Indiana.

The sale price for this portfolio is reported by the Herrick Company to be in excess of $550m, of which the Maricopa county portion accounts for roughly $35.28m. According to Norton Herrick, Chairman of the Herrick Company, “With these transactions, we have executed on our strategy to profitably dispose of certain assets and have successfully positioned the company for future growth.”

Information on the individual properties is broken out below:

Flag	Units	Sub-Market	Price	Price Per Unit
Studio 6 #6030	140	Deer Valley	$4,989,202	$33,855.30
Motel 6 #1315	101	Tempe	$4,615,248	$45,695.42
Studio 6 #6031	149	Ahwatukee	$4,477,231	$28,546.10
Motel 6 #1329	61	Airport	$3,975,906	$61,919.00
Motel 6 #1303	60	Tempe	$2,157,779	$36,962.98
Motel 6 #1304	351	SW Phoenix	$15,134,418	$43,118.0

Herrick had previously acquired the properties February 28^th, 2001 for a combined price of $33m or $38,291 per door. These properties—as well as 32 others in the aforementioned states—were secured by a $165,955,396 cross-collaterilized deed of trust with Berkshire Hathaway Credit Corporation issued at time of acquisition and released with the exercise of the ACCOR purchase option.

The option to purchase arose from a master lease between Herrick as lessor and ACCOR North America as lessee whereby ACCOR would manage the portfolio for a period of 25 years with two 10-year options to extend; following consummation of the master lease, ACCOR North America then entered into a similarly termed sublease agreement with Motel 6 Operations LLC, the entity responsible for the operation of the hotels. ACCOR will now assume fee simple ownership of the properties and continue in its capacity as their manager.

By:

Paul Dionne

Director of Analytics