BETHESDA, Md.–(hospitalitybusinessnews.com)– RLJ Lodging Trust today announced that the Company has sold a total of 24 hotels for approximately $240 million. The sale price represents approximately a 7.9% capitalization rate on the hotels’ 2014 net operating income, including planned capital expenditures.
“We are very pleased with the execution of our capital recycling program. In total, we have now sold 39 hotels for approximately $370 million over the last 16 months and improved our overall portfolio metrics,” commented Thomas J. Baltimore, Jr., President and Chief Executive Officer. “We remain committed to creating long-term shareholder value through enhancing our portfolio’s quality and recycling capital into higher-growth markets.”
These 24 hotels were initially acquired as part of a large portfolio transaction in 2006. The hotels, which were sold through a combination of individual and portfolio sales, were selected based on operating performance, market location, and pending capital requirements relative to the Company’s long-term investment strategy. The sale of these hotels is immediately accretive to the Company’s portfolio quality and growth profile. Additionally, the Company estimates that it saved approximately $65 million of pending capital expenditures through the sale of these assets.
The 2014 revenue per available room (“RevPAR”) of the hotels sold was approximately $72, which represents more than a 40% discount to the portfolio average. In aggregate, the hotels’ EBITDA represents approximately 7% of the Company’s 2014 hotel EBITDA.
Detailed information regarding the portfolio is set forth in the table below:
|Courtyard Grand Junction||Grand Junction||CO||136||$60|
|Residence Inn Grand Junction||Grand Junction||CO||104||$65|
|Homewood Suites Tampa Brandon||Tampa||FL||126||$94|
|Fairfield Inn & Suites Tampa Brandon||Tampa||FL||107||$54|
|Courtyard Tampa Brandon||Tampa||FL||90||$77|
|Courtyard Chicago Schaumburg||Schaumburg||IL||162||$82|
|Springhill Suites Chicago Schaumburg||Schaumburg||IL||132||$78|
|Residence Inn Chicago Schaumburg||Schaumburg||IL||125||$103|
|Courtyard Fort Wayne||Fort Wayne||IN||142||$54|
|Springhill Suites Indianapolis Carmel||Carmel||IN||126||$78|
|Residence Inn Indianapolis Carmel||Carmel||IN||120||$84|
|Fairfield Inn & Suites Merrillville||Merrillville||IN||112||$55|
|Hampton Inn Merrillville||Merrillville||IN||64||$78|
|Marriott Auburn Hills Pontiac Centerpoint||Pontiac||MI||290||$81|
|Holiday Inn Grand Rapids Airport||Kentwood||MI||148||$67|
|Residence Inn Detroit Pontiac Auburn Hills||Pontiac||MI||114||$82|
|Courtyard Detroit Pontiac Bloomfield||Pontiac||MI||110||$63|
|Courtyard Benton Harbor St Joseph||Benton Harbor||MI||98||$73|
|Fairfield Inn & Suites San Antonio Airport||San Antonio||TX||120||$59|
|Residence Inn Austin Round Rock||Round Rock||TX||96||$87|
|Courtyard San Antonio Airport Northstar||San Antonio||TX||78||$86|
The Company expects to use the net proceeds to fund future acquisitions or for general corporate purposes.
Following the sale of these assets, the Company now owns 126 properties, consisting of 124 hotels with more than 20,400 rooms and two planned hotel conversions, located in 21 states and the District of Columbia.