BETHESDA, MD—RLJ Lodging Trust has sold a total of 24 hotels for approximately $240 million. representing approximately a 7.9% capitalization rate on the hotels’ 2014 net operating income, including planned capital expenditures.
The 24 hotels were initially acquired as part of a large portfolio transaction in 2006. The hotels, which were sold through a combination of individual and portfolio sales, were selected based on operating performance, market location and pending capital requirements relative to the company’s long-term investment strategy, according to the REIT. The sale of these hotels is accreditive to the company’s portfolio quality and growth profile, it added.
The company estimates it saved approximately $65 million of pending capital expenditures through the sale of these assets.
“We are very pleased with the execution of our capital recycling program. In total, we have now sold 39 hotels for approximately $370 million over the last 16 months and improved our overall portfolio metrics,” commented Thomas J. Baltimore Jr., president/CEO. “We remain committed to creating long-term shareholder value through enhancing our portfolio’s quality and recycling capital into higher-growth markets.”
The 2014 RevPAR of the hotels sold was approximately $72, which represents more than a 40% discount to the portfolio average, according to the REIT.
The company expects to use the net proceeds to fund future acquisitions or for general corporate purposes.
The company now owns 126 properties, consisting of 124 hotels representing more than 20,400 rooms and two planned hotel conversions.