Hilton Cabana Miami Beach

BETHESDA, MD—Hotel acquisitions may be down year-to-date, according to SNL Financial, but apparently RLJ Lodging has not gotten the memo. The REIT has been busy continuing to implement its capital recycling program, selling off non-core assets as it snaps up properties it feels are competitive for its portfolio.

In the case of the latter: RLJ Lodging just closed on the previously announced acquisition of the 231-room Hilton Cabana Miami Beach for $71.6 million, or approximately $310,000 per key. The property was acquired at a forward cap rate of approximately 8.5% on the hotel’s projected 2015 net operating income, and at a significant discount to replacement cost. The hotel is located along the 6200 block of Collins Avenue in Miami Beach–the “Millionaire’s Row” submarket.

On the other side of the ledger, the REIT has sold off the 194-room Holiday Inn Austin NW Arboretum Area in Austin, Texas for $13.5 million, or $70,000 per key. The sale price represents approximately a 7.9% cap rate on the hotel’s 2014 net operating income.

To date, we have sold 15 assets for gross proceeds of more than $130 million,” according to CEO Thomas J. Baltimore, Jr. “We remain committed to further recycling capital into assets that improve our portfolio quality,” he says in a prepared statement.