PALM BEACH, FL—Locally-based Chatham Lodging Trust and NorthStar Realty Finance Corp. of New York City report the closing of their previously announced deal to purchase a 52-hotel, 6,976-room portfolio from Inland American.

NorthStar owns a 90% ownership interest in the joint venture, and Chatham owns a 10% interest. Chatham acquired its 10% equity interest in the joint venture for approximately $28 million. The transaction breaks down to the Northstar-Chatham joint venture acquiring 48 upscale extended-stay hotels and premium-branded, select-service hotels from Inland and Chatham purchasing four hotels as part of the sale of the 52-hotel portfolio for a purchase price of $106.7 million, or approximately $186,000 per room, before deal costs. The four hotels purchased by Chatham are: the 179-room Hilton Garden Inn Burlington, Burlington, MA; the 176-room Courtyard by Marriott Dallas (Addison), TX; the 120-room Residence Inn by Marriott Houston West University Houston, TX; and the 100-room Courtyard by Marriott Houston West University, Houston, TX.

“These top-tier branded hotels expand our presence in some of the country's best hotel markets and match our strategy of targeting specific high growth markets based on growing corporate demand tied to the technology, medical and oil and gas industries,” says Jeffrey H. Fisher, Chatham's chief executive officer and president. “Given our confidence in the health of the hotel industry, we will continue to be net buyers of high-quality hotels.”

Chatham financed the investments with available cash and borrowings under its revolving credit facility of $69 million. In late September, Chatham issued 6.9 million common shares, generating net proceeds of approximately $144.6 million, which was used at the time to repay any borrowings outstanding on its revolving credit facility.

All four of the Chatham wholly-owned hotels and 34 of the 48 hotels owned by the joint venture will be managed by Island Hospitality Management, a hotel management company that currently is 90% owned by Fisher.