Swirls of transactions marked 2007's first quarter as several companies announced merger agreements or amended their previously announced deals.

On Jan. 19, Morgan Stanley Real Estate announced an agreement to acquire the public, non-listed hotel REIT CNL Hotels & Resorts for approximately $6.6 billion. In conjunction with this transaction, Ashford Hospitality Trust (NYSE: AHT) acquired 51 CNL hotels for approximately $2.4 billion. For Ashford, the transaction will broaden the company's exposure to upper upscale assets and major metropolitan and coastal markets, says Douglas Kessler, chief operating officer and head of acquisitions.

"Acquiring this portfolio of hotels has been a unique opportunity, given the quality of assets and the location of the brands. It's really a best-in-class portfolio, a transformational opportunity for Ashford," Kessler says.

In February, the non-traded lodging REIT Apple Hospitality Two, Inc. entered into a purchase agreement with an ING Clarion Partners LLC affiliate for approximately $890 million. Also in February, North Carolina-based Winston Hotels agreed to bow out of the publicly traded REIT industry, agreeing to an all-cash acquisition by Wilbur Acquisition Holding Company LLC for $14.10 per share. At press time, all of the above deals were scheduled to close during the second quarter of 2007.

On Mar. 13, the diversified REIT Spirit Finance Corporation (NYSE: SFC) announced it had reached a definitive merger agreement with a consortium led by Macquarie Bank Ltd. According to company statements, the consortium intents to acquire Spirit Finance for approximately $3.5 billion, including approximately $1.9 billion in assumed debt, in a deal scheduled to close in the third quarter of 2007.

"These successive deals are a continuation of a trend that started a couple of years ago," says David Loeb, senior research analyst and managing director with Robert W. Baird. "A good deal of capital is looking for a home in real estate. That starts with capital from pension funds and overseas funds, a lot of which has been funneled by private equity sources buying companies, participating in joint ventures, and leading to the circulation of assets, both public to private and private to public."