BETHESDA, MD-On the heels of its purchase of a 10-asset hotel portfolio from Hyatt Hotels Corp. for $313 million, locally-based RLJ Lodging Trust has closed on the sale of a portfolio of 11 hotels for approximately $85 million. The assets are all non-core and part of the REIT's capital recycling program, CEO Thomas J. Baltimore, Jr. says in a prepared statement. "The sale of these assets are immediately accretive to our portfolio's RevPAR and the net proceeds will be reinvested into higher-yielding hotels, such as our recently announced Hyatt deal."
The sale price represents a 7.9% capitalization rate on the portfolio's estimated 2013 net operating income, adjusted for approximately $23 million of pending capital expenditures.
The estimated combined 2013 revenue per available room for the portfolio was approximately $68.00, a discount of more than 30% to the REIT's estimated 2013 pro forma RevPAR. The portfolio's hotel EBITDA represented less than 3% of RLJ's estimated 2013 pro forma hotel EBITDA. The company says that its sale will improve its RevPAR and geographic profile.
The 11 hotels, scattered throughout the country, in Colorado, Florida, Indiana, Minnesota, Nevada and Texas, were some of the company's smallest hotel EBITDA contributors. They were selected based on their operating performance and market location, as well as pending capital requirements.
Also this month, RLJ acquired ten hotels from Hyatt Hotels Corp., a mix of the Hyatt, Hyatt Place and Hyatt House flags. They are located primarily in California, except for three properties in Texas, North Carolina and Wisconsin.
RLJ plans to invest approximately $25 million in the portfolio over the next 24 months.
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