ANNAPOLIS—It has been a busy few days for the locally-based Chesapeake Lodging Trust, with the REIT announcing it has acquired a Miami Beach, FLA, hotel, secured a $125 million loan for the hotel and amended its credit line to expand its borrowing capacity by $50 million.

The hotel, The Royal Palm-Miami South Beach, traded for $278 million, or $707,000 per key. Along with the acquisition, the REIT entered into a management agreement with HEI Hotels & Resorts to operate the hotel. It also is reflagging the property with Starwood Hotels & Resorts.

"The hotel is in excellent shape and conveys the contemporary feel of South Beach," says James L. Francis, Chesapeake Lodging Trust's CEO, in a prepared statement. The company is planning minor changes to the property to reposition it, but there will be no disruption to its operations, he adds.

The partially fund the acquisition Chesapeake secured a $125 million two-year term from Wells Fargo Bank. The loan, which is collateralized with the property, provides for a one-year extension and has an interest rate equal to LIBOR, plus 2.40%. The REIT entered into an interest rate swap to fix the interest rate for the original two-year term at 3.34% per annum.

The agreement to reflag the hotel is an interim franchise arrangement under Starwood's new Luxury Collection brand. The Royal Palm will be the first to launch under this flag within the next 60-90 days. South Beach is largely a non-branded marketplace and affiliating with Starwood, the REIT will have the flexibility of providing independent services and operating standards, while benefiting from Starwood's global reservation system, distribution channels and loyalty program, Francis said.

Earlier this month in an unrelated move, the REIT also announced it amended its credit agreement by converting it from a secured to an unsecured credit facility and by increasing its size by $50 million. It also lowered the interest rate and extended the initial term.

A call to the REIT by GlobeSt.com was not immediately returned.