Chatham Lodging Trust (NYSE: CLDT) today announced that it has sold the 145-suite Homewood Suites by Hilton Carlsbad, Calif., for $33 million, or approximately $228,000 per suite. Chatham sold the hotel at an approximate 6.5 percent net operating income capitalization rate (after an assumed annual capital reserve of 4.0 percent of total hotel revenues) based on trailing 12 months performance.
“This is the first sale under our capital recycling initiative that we announced earlier this year,” highlighted Jeffrey H. Fisher, Chatham’s chief executive officer and president. “Our goal is 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.”
In connection with the sale, the buyer assumed a $20 million CMBS loan that carried an interest rate of 4.3 percent. Remaining proceeds of $13 million will be utilized to reduce borrowings on Chatham’s unsecured credit facility.
Chatham Lodging Trust is a self-advised, publicly-traded real estate investment trust focused primarily on investing in upscale extended-stay hotels and premium-branded, select-service hotels. The company owns interests in 135 hotels totaling 18,516 rooms/suites, comprised of 40 properties it wholly owns with an aggregate of 6,018 rooms/suites in 16 states and the District of Columbia and a minority investment in two joint ventures that own 95 hotels with an aggregate of 12,498 rooms/suites.
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