February 24, 2015 – RLJ Lodging Trust (the “Company”) (NYSE:RLJ) today announced that the Company has sold a total of 24 hotels for approximately $240 million. The sale price represents approximately a 7.9% capitalization rate on the hotels’ 2014 net operating income, including planned capital expenditures.
“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,” commented Thomas J. Baltimore, Jr., President and Chief Executive Officer. “We remain committed to creating long-term shareholder value through enhancing our portfolio’s quality and recycling capital into higher-growth markets.”
These 24 hotels were initially acquired as part of a large portfolio transaction in 2006. 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 the Company’s long-term investment strategy. The sale of these hotels is immediately accretive to the Company’s portfolio quality and growth profile. Additionally, the Company estimates that it saved approximately $65 million of pending capital expenditures through the sale of these assets.
The 2014 revenue per available room (“RevPAR”) of the hotels sold was approximately $72, which represents more than a 40% discount to the portfolio average. In aggregate, the hotels’ EBITDA represents approximately 7% of the Company’s 2014 hotel EBITDA.
Detailed information regarding the portfolio is set forth in the table below:
The Company 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.
Forward Looking Statements
The following information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “plan,” “may,” “will,” “will continue,” “intend,” “should,” “may” or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and the Company’s actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: the current global economic uncertainty, increased direct competition, changes in government regulations or accounting rules, changes in local, national and global real estate conditions, declines in the lodging industry, seasonality of the lodging industry, risks related to natural disasters, such as earthquakes and hurricanes, hostilities, including future terrorist attacks or fear of hostilities that affect travel, the Company’s ability to obtain lines of credit or permanent financing on satisfactory terms, changes in interest rates, access to capital through offerings of the Company’s common and preferred shares of beneficial interest, or debt, the Company’s ability to identify suitable acquisitions, the Company’s ability to close on identified acquisitions and integrate those businesses and inaccuracies of the Company’s accounting estimates. Given these uncertainties, undue reliance should not be placed on such statements. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements and urge investors to carefully review the disclosures the Company makes concerning risks and uncertainties in the sections entitled “Risk Factors,” “Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the SEC.
