PHILADELPHIA — RLJ Lodging Trust (NYSE: RLJ) has sold Sheraton Society Hill, a 364-room hotel located in Philadelphia, for $95.5 million. The price represents a capitalization rate of 5.6 percent on the hotel’s net operating income (NOI) for 2017, as well as a price per room of approximately $262,000.
Maryland-based RLJ has now generated $300 million from asset sales since merging with Texas-based FelCor Lodging Trust Inc. in September 2017. The company is planning to generate an additional $200 million to $400 million in proceeds this year, according to Ross H. Bierkan, president and CEO of RLJ.
“The sale of another non-core asset at a highly accretive valuation highlights the meaningful progress we have achieved in realizing the embedded value from the FelCor merger,” says Bierkan.
The Buccini/Pollin Group purchased the property and plans a multi-million dollar renovation and rebranding. PM Hotel Group, a national hotel management company, will manage the hotel.
Located in the Old City district of Philadelphia at One Dock St., the hotel offers a close proximity to a number of historic attractions, including the National Constitution Center and Penn’s Landing. Amenities at the hotel include an indoor swimming pool, fitness center and onsite restaurant, as well as 20,000 square feet of meeting and event space.
“The Sheraton Society Hill is a remarkable asset in an unmatched location surrounded by numerous business and leisure demand generators, from the Liberty Bell and Independence Hall to Fortune 500 companies like Comcast and Aramark,” says Dave Pollin, co-founder of The Buccini/Pollin Group. “We are in the advanced planning stages of a complete makeover of the hotel to upgrade the guest experience. In addition to improving both guest rooms and public spaces, we intend to change brand affiliations to better match and serve the surrounding community.”
— David Cohen