(Mark Your Calendars: RealShare Apartments East, February 15th in Washington, DC).
ANNAPOLIS, MD-Chesapeake Lodging Trust delivered a solid performance for shareholders with its fourth quarter earnings report. Funds from operations, an important metric for REITs, rose to $9.19 million or $0.29 per share from $0.7 million or $0.04 per share year-over-year.
It posted net income of $2.88 million or $0.09 per share, compared to a loss of $1.52 million or $0.09 per share in Q4 2010.
The quarter capped off a year characterized by acquisitions, according to a statement to shareholders by James L. Francis, the REIT’s president and CEO. "2011 was an exceptional year for Chesapeake on various fronts," he said. "We more than doubled the size of our high-quality hotel portfolio by capitalizing on attractive acquisition opportunities, added further flexibility to our revolving credit facility and took advantage of the attractive interest rate environment and delivered strong operating results."
Among the more recent acquisitions, Chesapeake acquired the 613-room Denver Marriott City Center for a purchase price of $119 million and the Holiday Inn New York City Midtown—31st Street for $52.2 million. Last month it announced definitive agreement to acquire the 185-room Hyatt Place New York Midtown South for $76.5 million.
The REIT also closed on a new three-year revolving credit facility, increasing the amount available to it to $200 million, from $150 million, with a potential maximum of $300 million.
The interest rate was reduced to LIBOR, plus 2.75%-3.75%—compared to LIBOR plus 3.75%, subject to a LIBOR floor of 2%, under the previous facility.
The outlook for 2012, which includes the REIT’s current 12-hotel portfolio and the pending acquisition of Hyatt Place New York Midtown South, includes an increase in pro forma RevPAR of 6.5% to 8.5% over 2011. Net income is expected to range from $19.2 million to $22.1 million.
"Coupled with little-to-no supply growth in our current markets, we expect the portfolio to generate strong returns on investment and to produce meaningful free cash flow for our shareholders," Francis said.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
