Volvo’s New Plant Prompts Chatham to Add to South Carolina Portfolio
The deal for the 96-room hotel calculated out to approximately $217,000 per room and increases Chatham’s presence in this suburb of Charleston.
SUMMERVILLE, SC—Chatham Lodging Trust of West Palm Beach, FL has increased its hotel holdings in South Carolina with the $20.8-million acquisition of the Residence Inn by Marriott Charleston Summerville.
The deal for the 96-room hotel calculated out to approximately $217,000 per room and increases Chatham’s presence in this suburb of Charleston. Chatham Lodging also owns the Courtyard by Marriott Charleston Summerville.
“This is a beautiful, brand new, superior-quality hotel located in Nexton, a rapidly expanding area just outside of Charleston which sits in the direct path of metro Charleston’s most energetic growth,” says Jeffrey H. Fisher, Chatham’s chief executive officer and president. “Including the Courtyard by Marriott Charleston Summerville, this marks our second hotel in the heart of Nexton, a thriving community which mixes a smart, vibrant blend of businesses, schools, new homes, apartments, shops and eateries connected to each other by trails, parks and nature, and connected to the world through leading-edge technology.”
Chatham Lodging funded the purchase using available cash and borrowings on its unsecured credit facility. The hotel will be managed by Island Hospitality Management, which is 51% owned by Fisher. Chatham estimates it acquired the property at a year two net operating income capitalization rate of approximately 8%.
Fisher adds that the Nexton/Summerville market will get a major boost now that Volvo has completed construction of its first American factory, a, 2.3-million-square-foot facility on nearly 3,000 acres very close to Nexton. The first vehicles at the plant are expected to come off the production line in the next few months.
“Volvo has already announced plans to expand the facility with a second production line with completion estimated in 2020,” Fisher adds. “Our two hotels are the nicest and closest hotels to the new factory and are best positioned to service corporate guests given the mix of rooms and suites at our Courtyard and Residence Inn hotels.”
The Summerville/Nexton region is home to more than 250 technology companies employing more than 11,000 employees. Specifically, the Nexton development is projected to encompass approximately 10,000 homes, eight million commercial square feet and a medical campus over the next decade. In addition to the nearby Volvo facility, other major companies, such as Daimler and Boeing, have significant facilities in the area and have acquired additional land to expand their operations, Chatham Lodging notes.
Chatham Lodging owns interests in 136 hotels totaling 18,616 rooms/suites, comprised of 41 properties it wholly owns with an aggregate of 6,117 rooms/suites in 15 states and the District of Columbia. It also has a minority investment in two joint ventures that own 95 hotels with an aggregate of 12,499 rooms/suites.