WASHINGTON, D.C. Chesapeake Lodging Trust has agreed to buy the 204-key Courtyard Washington Capitol Hill/Navy Yard hotel in Washington for US$68 million, or about US$330,000 per key, in an off-market transaction.
Annapolis, Maryland-based Chesapeake has concurrently raised US$244 million from an equity offering, giving the company roughly US$450 million of buying power, analyst David Loeb of R.W. Baird & Co. estimates. “The additional capital will allow Chesapeake to almost double the size of its portfolio,” Loeb writes in an investor note. “Also, we believe a larger float should increase liquidity and attract more investor interest. Not only does the offering provide needed growth capital, but it also makes the shares more attractive to investors and should allow the stock to trade at a fair valuation, in our view.”
Chesapeake will fund the Courtyard Washington acquisition by assuming US$37.7 million of existing mortgage debt and borrowing the rest. Chesapeake plans to hire a third-party management company to operate the hotel under the Courtyard flag.
The seller was not disclosed. The five-year-old property is located one block from Navy Yard Metro Station and three blocks from Nationals Park, home of the professional baseball team.