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.
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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.
