Chatham Lodging Trust Announces Sale of Four Hotels

Rhea-AI Summary

Chatham Lodging Trust (NYSE: CLDT) has completed the sale of four hotels, totaling 537 rooms, for approximately $80 million. This strategic move aims to enhance portfolio quality and increase liquidity for future growth, with the transactions yielding capitalization rates of about 2% and 6% on net operating income for 2021 and 2019, respectively. The hotels sold include properties in Massachusetts and Texas. CEO Jeffrey H. Fisher stated that these sales are a significant step in modernizing their hotel portfolio and improving their balance sheet.

Positive

• Sale of four hotels for approximately $80 million enhances liquidity.
• Capitalization rates of 2% and 6% on net operating income indicate strong transactions.
• Strengthens balance sheet post-pandemic, allowing for future acquisitions.

Negative

• None.

Sales Enhance Portfolio Quality, Provide Ample Liquidity for Growth

WEST PALM BEACH, Fla.--(BUSINESS WIRE)-- Chatham Lodging Trust (NYSE: CLDT), a hotel real estate investment trust (REIT) focused on investing in upscale, extended-stay hotels and premium-branded, select-service hotels, today announced the closing of the sales of four hotels comprising 537 rooms for aggregate proceeds of approximately $80 million.

Including near term capital expenditure requirements, the aggregate sales proceeds would equate to an approximate 2 and 6 percent capitalization rate on net operating income for 2021 and 2019, respectively. The four hotels comprise the following:

• 180-room Hilton Garden Inn, Burlington, Massachusetts
• 100-room Courtyard by Marriott Houston West University
• 120-room Residence Inn by Marriott Houston West University
• 137-room Homewood Suites by Hilton Dallas Market Center

	Burlington		CY West U		RI West U		HW Dallas
Year Built	1975		2004		2004		1998
2021 RevPAR	$31		$60		$64		$80
2019 RevPAR	$110		$94		$85		$97
CAPEX (2022-2023)	~$7mm		~$4mm		<$1mm		<$1mm

“We want to recycle capital out of older assets into newer hotels with higher growth prospects. The sale of these four hotels is a giant step towards reducing the average age of our portfolio and providing ample liquidity for future growth,” highlighted Jeffrey H. Fisher, Chatham’s president and chief executive officer. “These are home-run transactions. We have emerged from the pandemic with a stronger balance sheet and have the capacity to make value-enhancing acquisitions and generate incremental distributable cash flow,” Fisher concluded.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns 39 hotels with 5,914 rooms/suites in 16 states and the District of Columbia. Additional information about Chatham may be found at chathamlodgingtrust.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Statements about the company's business that are not historical facts are "forward-looking statements." Forward-looking statements are based on current expectations. You should not rely on our forward-looking statements because the matters they describe are subject to known and unknown risks and uncertainties that could cause the company's future results, performance, or achievements to differ significantly from the results, performance, or achievements expressed or implied by such statements. Such risks are set forth under the captions "Item 1A. Risk Factors" and "Forward-Looking Statements" in our annual report on Form 10-K and under the caption "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" (or similar captions) in our quarterly reports on Form 10-Q, and as described in our other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the dates on which they are made, and the company undertakes no obligation to update publicly or revise any guidance or other forward-looking statement, whether as a result of new information, future developments, or otherwise, unless required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220516005193/en/

Dennis Craven (Company)

Chief Operating Officer

(561) 227-1386

Source: Chatham Lodging Trust

FAQ

What hotels did Chatham Lodging Trust sell?

Chatham Lodging Trust sold four hotels, including a Hilton Garden Inn in Burlington, Massachusetts, and two Courtyard and Residence Inn properties in Houston, Texas.

How much did Chatham Lodging Trust earn from the hotel sales?

Chatham Lodging Trust earned approximately $80 million from the sale of four hotels.

What is the capitalization rate from the hotel sales by Chatham Lodging Trust?

The hotel sales yielded capitalization rates of approximately 2% for 2021 and 6% for 2019 on net operating income.

How is Chatham Lodging Trust using the proceeds from the hotel sales?

Chatham Lodging Trust is using the proceeds to improve liquidity and invest in newer hotels with higher growth potential.