KEY WEST, FL—The 215-room DoubleTree Grand Key Resort here has been acquired by Bethesda, MD-based RLJ Lodging Trust for $77 million or approximately $358,000 per key.

The new owner says that in addition to upgrading the property, RLJ plans to replace the hotel's existing management company. Upon completing an estimated $7-million renovation in 2015, RLJ Lodging expects the purchase price plus capital expenditures will represent a forward capitalization rate of approximately 8.0% based on the hotel's projected 2016 net operating income.

“We are excited to add an additional Key West asset to our portfolio at a significant discount to both replacement cost and recent per-key trades,” says Thomas J. Baltimore, Jr., president and CEO of RLJ Lodging Trust. “We expect that our knowledge of the market along with the implementation of various initiatives will create additional upside at this strategically-located hotel.”

In 2013, the Key West market revenue per available room was nearly $218, one of the highest RevPAR markets in the country. Key West's RevPAR growth in 2013 was 17.8% and the trailing 12 months as of July 2014 was 20.5%. The hotel's 2013 RevPAR was nearly a 50% premium to the company's 2013 Pro forma RevPAR, which will further enhance the composition of the company's portfolio, RLJ Lodging states in its announcement.

With its latest purchase, RLJ Lodging now owns 150 properties, comprised of 148 hotels with more than 23,300 rooms and two planned hotel conversions, located in 21 states and the District of Columbia. According to its website, RLJ also owns the Fairfield Inn & Suites Key West at 2400 North Roosevelt Blvd.