Cerberus Capital Management and Chatham Lodging Trust have sold the former Innkeepers USA Trust portfolio for a gross purchase price of US$1.3 billion.
Under the deal a joint venture between NorthStar Realty Finance Corp., New York City, and Chatham Lodging Trust, Palm Beach, Florida, will acquire 47 of the hotels and Chatham will acquire 4 of the hotels outright.
The Ceberus-Chatham JV bought the 51-hotel portfolio, which consists of hotels located throughout the U.S., in a US$1 billion transaction in 2011.
Completion of the transaction is contingent upon satisfaction of certain conditions, and closing is expected by the end of the second quarter. Based on the net purchase price, Chatham would recognize a gain of approximately US$77 million.
Northstar will acquire Cerberus’ 89.7% interest in the joint venture, and Chatham will retain its 10.3% ownership stake. The joint venture will acquire 47 of the 51 hotels for a gross purchase price of US$958.5 million. As part of the transaction, Chatham will acquire four Silicon Valley Residence Inn hotels from the Cerberus/Chatham portfolio, comprising 751 guestrooms, for a net cash purchase price of US$272.6 million. Chatham plans to partially redevelop and expand all four of the hotels increasing the guestroom count by 36 percent to a total of 1,023 guestrooms.