BETHESDA, Md.—RLJ Lodging Trust announced that it acquired the long-term leasehold interest in the 399-room Courtyard by Marriott Waikiki Beach for a purchase price of $75.3 million, or approximately $189,000 per key. The purchase price represents a forward capitalization rate of approximately 7.8% based on the hotel’s projected 2014 net operating income.
“We are excited to increase our presence in the west and expand our geographic footprint into another gateway market,” commented Thomas J. Baltimore, Jr., president and chief executive officer. “The Hotel’s strong brand affiliation and prime location in Waikiki will allow us to capitalize on the strong lodging fundamentals in Oahu.”
The hotel is located in Honolulu, on the Hawaiian island of Oahu. The Oahu market recorded RevPAR growth of 16.7 percent in 2012, which was the highest among the top 25 U.S. lodging markets according to Smith Travel Research. Year-to-date through April 2013, the strong growth continued as RevPAR increased 17.9 percent over the same time period in 2012. The hotel’s RevPAR, which represents more than a 40 percent premium to the company’s 2012 pro forma RevPAR, will be among the company’s top 10 hotels and further enhance the composition of the portfolio.
The Waikiki submarket is currently underrepresented by Marriott branded hotels. RLJ expects that the hotel’s affiliation with Marriott’s strong reservation system and guest loyalty program, as well as its proximity to the most visited attractions in the area, will benefit the asset and position it for strong growth.
With the addition of this asset, the RLJ Lodging Trus now owns 149 properties.