To say it's been a busy few weeks for Motley Fool Income Investor selection Equity Inns (NYSE:ENN) is a bit of an understatement. But before digging into the recent happenings, it makes sense to note that Equity Inns, like Hospitality Properties (NYSE:HPT), Boykin Lodging (NYSE:BOY), and Host Marriott (NYSE:HMT), is a hotel real estate investment trust.

First up are recent property acquisitions -- five in Florida and one in Tennessee. All of the hotels are under the Marriott or Hilton umbrella and are similar to the mid- to upper-scale hotels that Equity Inns already held in its portfolio. More importantly, the company believes that all of the acquired properties will add to funds from operations (FFO) in 2005. That's a great sign for income investors, because the continued increase in funds points to future increases in dividends and likely further capital appreciation.

The other recent positive development is a new credit line at lower rates. It does mean variable rate debt, which can be risky for a REIT. However, this line of credit represents a reasonable portion of Equity Inns' enterprise value, and the bulk of the company's debt is at fixed rates. At the end of the day, this credit line replaces a previous credit line with lower interest rates, which the company estimates will save it $500,000 per year. Again, this means more funds available to the business, and the fact that Equity Inns was able to replace its existing line at better terms is a positive sign.

Transactions such as these have been fairly consistent for Equity Inns and have led to Income Investor subscribers enjoying a total return of 21.7% against the Standard & Poor's 500's 1% return. While that's a phenomenal return considering the 4.5% dividend, it is only a six-month return, and a certain discount should be applied to returns over such short periods. That said, the company's management appears to be on the ball, and by focusing on quality properties with consistent cash flow, management is building a solid company in an industry that is coming out of a difficult period.

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Nathan Parmelee has a beneficial interest in shares of Equity Inns, but he has no financial interest in any of the other companies mentioned. You can view his profile here. The Motley Fool has an ironclad disclosure policy.