RLJ Lodging Trust Sells 24 Hotels

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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:

Property City State Rooms 2014 RevPAR
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
Courtyard Merrillville Merrillville IN 112 $59
Fairfield Inn & Suites Merrillville Merrillville IN 112 $55
Courtyard Valparaiso Valparaiso IN 111 $41
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
Courtyard Mesquite Mesquite TX 101 $70
Residence Inn Austin Round Rock Round Rock TX 96 $87
Courtyard San Antonio Airport Northstar San Antonio TX 78 $86
Total 2,924 $72

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.

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