Chatham Lodging Trust Sells Two Western Pennsylvania Hotels for $10 Million
Chatham Lodging Trust (NYSE: CLDT), a hotel real estate investment trust (REIT) focused on investing in upscale, extended-stay hotels and premium-branded, select-service hotels, today announced that it has sold the 105-room Courtyard by Marriott Altoona, Pa., as well as the 86-suite SpringHill Suites by Marriott Washington, Pa. for approximately $10 million. Inclusive of brand required improvements of over $4 million, Chatham sold the hotels at an approximate six percent net operating income capitalization rate (after an assumed annual capital reserve of four percent of total hotel revenues).
"We acquired these smaller hotels as part of a portfolio purchase in 2010, and the hotels had a pretty good run for five years, but no longer meet our long-term investment strategy," highlighted Jeffrey H. Fisher, Chatham's chief executive officer and president. "These two non-core hotels, in very small markets and with combined RevPAR of $65, do not match the overall quality of our portfolio. Excluding the sold hotels, our comparable portfolio RevPAR increases to $135 from $133. Importantly, we do not have to invest over $4 million renovating these hotels. We will continue to opportunistically sell assets when we believe we can re-deploy those proceeds into high-quality hotel investments that earn higher yields in higher growth markets, thus enhancing our net asset value."
The company estimates that the hotels would have contributed approximately $1 million of EBITDA in 2019. Net proceeds from the sale will be utilized to reduce borrowings on Chatham's unsecured credit facility.