RLJ Lodging Trust, Bethesda, Maryland, announced on Thursday the purchase of 10 hotels located in California, Texas, North Carolina and Wisconsin from affiliates of Hyatt Hotel Corp., Chicago, for US$313 million.
A Hyatt affiliate will continue to operate the properties under new management agreements.
The hotels include:
- The 193-room Hyatt House San Diego/Sorrento Mesa
- The 142-room Hyatt House Cypress/Anaheim, located in Cypress, California
- The 234-room Hyatt House Emeryville/SF Bay Area, located in Emeryville, California
- The 151-room Hyatt Place Fremont/Silicon Valley, located in Fremont, California
- The 164-room Hyatt House San Jose/Silicon Valley, located in San Jose, California
- The 142-room Hyatt House San Ramon, located in San Ramon, California
- The 150-room Hyatt House Santa Clara, located in Santa Clara, California
- The 70-room Hyatt Market Street, The Woodlands, located in Woodlands, Texas
- The 163-room Hyatt House Charlotte/Center City, located in Charlotte, North Carolina
- The 151-room Hyatt Place Madison/Downtown, located in Madison, Wisconsin
RLJ estimates that the Hyatt Portfolio’s 2013 aggregate RevPAR will be greater than US$120. The acquisition will bring RLJ’s portfolio to 160 properties. “We are excited about expanding our strategic relationship with Hyatt and increasing our presence on the West Coast,” said Thomas Baltimore Jr., president and CEO of RLJ Lodging Trust. “Once completed, we will have acquired almost $900 million of assets since our IPO. This deal will be immediately accretive to the portfolio and will reinforce our stated goal of becoming the aggregator in this segment.”
Hyatt acquired the majority of the hotels in 2011. “This transaction demonstrates the value from asset recycling. We were able to successfully convert hotels in key markets to Hyatt brands and sell these hotels to a high quality owner while maintaining long term presence in key markets,” said Steve Haggerty, global head, real estate and capital strategy for Hyatt. “We are delighted to deepen our relationship with the team at RLJ Lodging Trust and look forward to future collaboration with them.”
The transaction is expected to be completed in March 2014 and is subject to customary closing conditions. RLJ made a US$10 million non-refundable deposit upon execution of the purchase agreement.
RLJ expects to fund the acquisition of the Hyatt portfolio through a combination of various financial resources available for use, including but not limited to cash on hand, its undrawn revolving credit facility, and debt financing.