BETHESDA, MD—RLJ Lodging Trust has acquired the 164-room Hyatt Place DC/Downtown/K Street in Washington, DC, and will acquire within the next few days the 170-room Homewood Suites Seattle/Lynnwood in Lynnwood, WA for a combined purchase price of $105.9 million. The company will use the cash available on its balance sheet for both acquisitions.
“We are excited to add another high-quality hotel to our Washington, DC, portfolio and expand our West Coast footprint with our first hotel in the greater Seattle area,” commented Thomas J. Baltimore, Jr., president and CEO. “These two acquisitions demonstrate our ability to leverage our extensive network to source accretive, off-market transactions in key target markets.”
RLJ acquired the recently opened Hyatt Place DC/Downtown/K Street in an off-market transaction for a purchase price of $68 million, or approximately $415,000 per key. The purchase price represents a forward capitalization rate of approximately 7.1% on the hotel’s projected 2016 net operating income, and the projected 2016 RevPAR is approximately 53% higher than the company’s 2014 reported RevPAR. The property opened in April following an extensive renovation and conversion from an office building. Located in downtown Washington, DC, the Hyatt Place is four blocks from three metro stations and centrally located to numerous business and leisure demand generators such as the White House, government agencies, national associations and law firms.
RLJ also will acquire the 170-room Homewood Suites Seattle/Lynnwood for $37.9 million, or approximately $223,000 per key. The purchase price represents a forward capitalization rate of approximately 8% on the hotel’s projected 2016 net operating income. Opened in May 2014, the Homewood Suites is located in Seattle’s premier Lynnwood submarket, a region anchored by diverse industries such as aerospace, technology and healthcare.
These recently opened properties are immediately accretive to RLJ’s portfolio RevPAR and are well-positioned to take advantage of strong demand dynamics, according to the company. With the addition of these two assets, it will own approximately 128 properties, comprised of 126 hotels with approximately 20,800 rooms and two planned hotel conversions, located in 22 states and the District of Columbia.