BETHESDA, Md.–(BUSINESS WIRE)–RLJ Lodging Trust announced that the company has closed on the sale of a portfolio of 11 hotels for approximately $85 million. The sale price represents approximately a 7.9 percent capitalization rate on the portfolio’s estimated 2013 net operating income, adjusted for approximately $23 million of pending capital expenditures.
“This transaction enabled us to make significant progress on our capital recycling program,” commented Thomas J. Baltimore, Jr., president and chief executive officer. “The sale of these assets are immediately accretive to our portfolio’s RevPAR and the net proceeds will be reinvested into higher-yielding hotels, such as our recently announced Hyatt deal. We are very pleased by the demand we saw while marketing these assets and we remain committed to expanding our capital recycling program.”
The estimated combined 2013 RevPAR for the portfolio was approximately $68, which represents a discount of more than 30 percent to the company’s estimated 2013 pro forma RevPAR. The sale of this portfolio will improve the company’s RevPAR and geographic profile.
The 11 hotels were some of the Company’s smallest hotel EBITDA contributors and were selected based on operating performance and market location relative to the company’s long-term strategy, as well as pending capital requirements.
The portfolio includes: Hyatt House Colorado Springs, Colorado Springs, Colo.; Courtyard Denver Southwest Lakewood, Lakewood, Colo.; Residence Inn Denver Southwest Lakewood, Lakewood, Colo.; SpringHill Suites Gainesville, Gainesville, Fla.; Residence Inn Indianapolis Airport, Indianapolis, Ind.; Fairfield Inn and Suites Indianapolis Airport, Indianapolis, Ind.; Courtyard Grand Rapids Airport, Kentwood, Miss.; Hampton Inn and Suites Las Vegas-Summerlin, Las Vegas, Nev.; Courtyard Austin University Area, Austin, Texas; Fairfield Inn and Suites Austin University Area, Austin, Texas; and the Hyatt House Dallas Richardson, Richardson, Texas.
RLJ expects to use the net proceeds to fund future acquisitions or for general corporate purposes.
Following the sale, the company owns 139 properties, consisting of 137 hotels with approximately 21,200 rooms and two planned conversions, located in 22 states and the District of Columbia.