BETHESDA, MD. — RLJ Lodging Trust (NYSE: RLJ) has sold 24 hotels for $240 million. The sale price represents approximately a 7.9 percent capitalization rate on the hotels’ 2014 net operating income, including planned capital expenditures.
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 RLJ’s long-term investment strategy. For the list of the hotels click here.
RLJ Lodging Trust estimates that it saved approximately $65 million of pending capital expenditures through the sale of these assets. The 24 hotels were initially acquired as part of a large portfolio transaction in 2006.
“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,” says Thomas Baltimore Jr., president and CEO of RLJ Lodging Trust. “We remain committed to creating long-term shareholder value through enhancing our portfolio’s quality and recycling capital into higher-growth markets.”
The 2014 revenue per available room (RevPAR) of the 24 hotels sold was approximately $72, which represents more than a 40 percent discount to the portfolio average. In aggregate, the hotels’ EBITDA represents approximately 7 percent of the company’s 2014 hotel EBITDA.
RLJ Lodging Trust expects to use the net proceeds to fund future acquisitions or for general corporate purposes. Following the sale of these assets, the company now owns 126 properties, consisting of 124 hotels with more than 20,400 rooms and two planned hotel conversions, located in 21 states and the District of Columbia.
Bethesda, Md.-based RLJ Lodging Trust’s stock price closed at $31.75 per share on Tuesday, Feb. 24, up from $25.77 per share a year ago.
— Danielle Everson