An additional 4.337 mil shares on top of the current 6.964 mil shares is a significant percentage increase for only $6.7 mil.

Here's my take on the situation. The equity raise appears to be required to pay down some of the borrowings under the BB&T LOC. I believe that the leverage under the agreement must not exceed 62.5%. It's currently about 59.1% . So, what's the problem? Well, the value of the hotels may be subject to change in early 2010, and the leverage restriction could be exceeded. Thus, the need for an equity raise.

On the other hand, they are doing a good job in holding RevPar, while competitors are down some 15%. FFO is positive for 3Q/09, and should remain slightly positive in 2010, unless conditions deteriorate faster than projected. No debt maturing prior to May 2011, and the hotels are in good shape.

So, what to do? Well, if hotel valuations continue to decline, additional equity raises may be needed. My sense is that this could be a close one, and we'll see a triple or nothing over the next 2-3 years.