ATLANTA—Bethesda, MD-based RLJ Lodging Trust has purchased the 194-room Hyatt Atlanta Midtown here for $49.5 million, or approximately $255,000 per key.
RLJ states in its announcement that the purchase price represents a forward capitalization rate of approximately 8.0% on the hotel’s projected 2015 net operating income. The company purchased the property with proceeds from its recent equity offering.
Originally opened in 1987 as a Wyndham, the hotel was closed by the prior owner to perform a $23-million comprehensive renovation and conversion to a compact full-service Hyatt. The hotel re-opened in July 2013. The company projects that during its first year of full ownership, the hotel’s revenue per available room will be more than a 16% premium to the company’s reported 2013 RevPAR.
“We are excited to add this newly renovated asset to our portfolio and continue to expand our relationship with Hyatt,” says Thomas J. Baltimore, Jr., president and CEO of RLJ Lodging. “The purchase of the hotel is immediately accretive to our portfolio and its central location in Midtown Atlanta, one of the most dynamic markets in the Southeast, will position it for exceptional growth.”
The hotel is the only Hyatt branded hotel in Midtown Atlanta, a submarket that contains approximately 16.5 million square feet of office space leased by such firms as the Federal Reserve Bank of Atlanta, Georgia Institute of Technology, Equifax, AT&T, Invesco, Norfolk Southern, and PricewaterhouseCoopers. In addition, Midtown is home to eight of the 10 largest law firms in Atlanta.
With the addition of its latest asset, RLJ Lodging owns 149 properties, comprised of 147 hotels with more than 23,100 rooms and two planned hotel conversions, located in 21 states and the District of Columbia.