WEST PALM BEACH, Fla.–December 22, 2017–Chatham Lodging Trust (NYSE: CLDT), a hotel real estate investment trust (REIT) focused on investing in upscale, extended-stay hotels and premium-branded, select-service hotels, today announced that it has sold the 145-suite Homewood Suites by Hilton Carlsbad, Calif., for $33 million, or approximately $228,000 per suite. Chatham sold the hotel at an approximate 6.5 percent net operating income capitalization rate (after an assumed annual capital reserve of 4.0 percent of total hotel revenues) based on trailing 12 months performance.
“This is the first sale under our capital recycling initiative that we announced earlier this year,” highlighted Jeffrey H. Fisher, Chatham’s chief executive officer and president. “Our goal is to opportunistically sell assets when we believe we can re-deploy those proceeds into high-quality hotel investments that earn higher yields in higher growth markets, thus enhancing our net asset value.”
In connection with the sale, the buyer assumed a $20 million CMBS loan that carried an interest rate of 4.3 percent. Remaining proceeds of $13 million will be utilized to reduce borrowings on Chatham’s unsecured credit facility.
