The Innkeepers portfolio includes upscale properties such as the Sheraton Rockville in Maryland.

NEW YORK CITY—NorthStar Realty Finance, headquartered here, and Chatham Lodging Trust have entered a $1.3-billion joint venture on the 51-property Innkeepers portfolio, the two REITs announced Friday as part of their respective quarterly earnings reports. Headquartered in Palm Beach, FL, Chatham and its previous JV partner, Cerberus Capital Management, put the portfolio up for sale this past January.

Under terms of the new JV, NorthStar and Chatham will pair up on ownership of 47 of the 51 upscale extended-stay and select-service properties, totaling about 6,100 keys mainly on the East and West coasts and mainly affiliated with Marriott or Hilton brands. The 89.7/10.3 JV is valued at $958.5 million, with NorthStar acquiring Cerberus’ stake.

Chatham is paying $341.5 million for the remainder, a quartet of Residence Inn hotels in Silicon Valley that total 750 rooms, and plans to redevelop them. Inland Hospitality will continue managing the entire Innkeepers portfolio, as it did under the Chatham/Cerberus JV.

David T. Hamamoto, NorthStar’s chairman and CEO, says his company is enthusiastic about both the portfolio acquisition and “the start of a broader strategic relationship with the teams at Chatham Lodging and Island Hospitality. Having spent a substantial portion of my career in and around the hotel industry, I believe that this investment, and the extended stay and select service space generally, will provide strong risk-adjusted returns, particularly as the broader economy continues to gain momentum.”

At Chatham, CFO Dennis Craven cites the success of his company’s partnership with Cerberus, “turning our initial $37 million investment into distributions of approximately $114 million and profits of approximately $77 million or $2.90 per share in less than three years.” Chatham and Cerberus paid $1.02 billion for what was then a 64-asset portfolio in October 2011, in a deal that enabled Innkeepers to exit Chapter 11 bankruptcy.

Jeff Fisher, Chatham’s CEO, says his company and NorthStar “share similar outlooks regarding the health of the hotel industry and performance expectations for the portfolio. Our long-term interests are aligned with a solid capital structure that we believe will provide strong, risk-adjusted returns for our shareholders.”