BETHESDA, MD-RLJ Lodging Trust has acquired the long-term leasehold interest in the 399-room Courtyard by Marriott Waikiki Beach for a purchase price of $75.3 million, or approximately $189,000 per key. The purchase price represents a forward capitalization rate of approximately 7.8% based on the hotel's projected 2014 net operating income. The company purchased this asset with cash available on its balance sheet.
“We are excited to increase our presence in the west and expand our geographic footprint into another gateway market,” commented Thomas Baltimore, Jr., president and CEO. “The hotel's strong brand affiliation and prime location in Waikiki will allow us to capitalize on the strong lodging fundamentals in Oahu.”
The hotel is located in Honolulu, on the Hawaiian island of Oahu. Honolulu serves as a
major gateway for travelers from the Pacific Rim and is ranked as the fourth highest
port of entry for international travelers to the U.S., behind only New York City, Miami,
and Los Angeles. In 2012, visitor arrivals and spending exceeded historical 2006 and 2007 peak levels.
As one of the leading hotel markets in the U.S. and a major tourist destination, the Oahu market recorded revenue per available room (“RevPAR”) growth of 16.7% in 2012, which was the highest among the top 25 U.S. lodging markets according to Smith Travel Research. Year-to-date through April 2013, the strong growth continued as RevPAR increased 17.9% over the same time period in 2012.
The hotel's location in the world famous neighborhood of Waikiki is in close proximity to the most visited tourist attractions in the area and various cultural and entertainment options. RL expects that the Courtyard by Marriott Waikiki Beach will benefit from the positive momentum in the leisure and hospitality sectors as well as from demand generated by all four branches of the U.S. military, which have a significant presence on the island.
The Waikiki submarket is currently underrepresented by Marriott branded hotels.
With the addition of this asset, RL Lodging now owns 149 properties, comprised of 148 hotels with more than 22,300 rooms and one planned hotel conversion, located in 22 states and the District of Columbia. RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust focused on acquiring premium-branded, focused-service and compact full-service hotels.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.