Chatham Closes on $21M Hotel Buy

HOLTSVILLE, NY-Chatham Lodging Trust has closed on its $21.3-million acquisition of the Residence Inn by Marriott Long Island Holtsville here, according to Real Capital Analytics. The Palm Beach, FL-based REIT had announced the all-cash acquisition earlier this month; RCA identifies the seller as New York City-based RD Management.

According to RCA data, the sale price for the four-story, 124-unit lodging property equates to approximately $171,774 per unit. It was opened at 25 Middle Ave. in this Suffolk County community six years ago.

When the acquisition was originally announced, Chatham CEO Jeffrey Fisher noted the property’s “superb visibility and accessibility off of the Long Island Expressway. The Long Island market is extremely attractive for a number of reasons, including its high barriers to new competition and multiple demand generators. This hotel is proximate to a large number of major businesses, as well as to such nearby tourist attractions as Fire Island and the Hamptons, which appeals to both business and leisure travelers.”

The Holtsville purchase represents Chatham’s 11th property acquired or under contract since a $160.4-million initial public offering in April. Island Hospitality Management, which is 90% owned by Fisher, will operate the property.

Chatham is in contract on another hotel property in the New York metro area, the Residence Inn New Rochelle in Westchester County. The REIT paid Cappelli Enterprises $21 million for the nine-story, 124-unit property in another all-cash deal. RCA says the purchase price equals $169,355 per unit.

Earlier this month, Chatham signed a commitment letter with a group of lenders for an $85-million senior secured credit facility. Barclays Capital and Regions Capital Markets are the joint lead arrangers; other banks participating include Credit Agricole Corporate and Investment Bank, UBS Investment Bank and US Bank National Assn.