BETHESDA, MD—RLJ Lodging Trust has sold two hotels in New York City for $286 million or $494,500 per key. Separately, the company sold a hotel in Bakersfield, CA for $13 million.
“We capitalized on the strong interest from international investors in the New York City market to execute an opportunistic transaction,” said Ross H. Bierkan, president and CEO. “While we continue to believe in the New York City market over the long-term, in the near-term these sales reduce our exposure as this market goes through a soft period.”
On Dec. 5, RLJ Lodging Trust sold the 298-room Hilton Garden Inn New York/West 35th St. and the 280-room Hilton New York Fashion District in Manhattan. The sale price represents a capitalization rate of approximately 4.7% on the hotels’ projected 2016 net operating income, including planned capital expenditures. The sale of the hotels reduces the share of the company’s pro forma 2016 Hotel EBITDA from the New York City market to less than 5%.
Additionally on Nov. 30, a 119-room non-core hotel in Bakersfield, CA was sold for $13 million or $108,000 per key. The sale price represents a capitalization rate of approximately 7.8% on the hotel’s projected 2016 net operating income, including capital expenditures.
The proceeds from the sale of these hotels will be used for general corporate purposes, which may include paying down debt and repurchasing shares, according to the company.