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

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

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

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In 2013, the Key West market revenue per available room wasnearly $218, one of the highest RevPAR markets in the country. KeyWest's RevPAR growth in 2013 was 17.8% and the trailing 12 monthsas 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 furtherenhance the composition of the company's portfolio, RLJ Lodgingstates in its announcement.

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

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John Jordan

John Jordan is a veteran journalist with 36 years of print and digital media experience.