BETHESDA, Md.–RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today announced that it has sold two hotels (the “Hotels”) in New York City for $286 million or $494,500 per key. Separately, the Company sold one other hotel in Bakersfield, CA for $13 million.
“We capitalized on the strong interest from international investors in the New York City market to execute an opportunistic transaction,” commented Ross H. Bierkan, President and Chief Executive Officer. “While we continue to believe in the New York City market over the long-term, in the near-term these sales reduce our exposure as this market goes through a soft period.”
On December 5, 2016, the Company sold the 298-room Hilton Garden Inn New York/West 35th Street and the 280-room Hilton New York Fashion District in Manhattan. The sale price represents a capitalization rate of approximately 4.7% on the Hotels’ projected 2016 net operating income, including planned capital expenditures. The sale of the Hotels reduces the share of the Company’s Pro forma 2016 Hotel EBITDA from the New York City market to less than five percent.
Additionally on November 30, 2016, the Company also sold a 119-room non-core hotel in Bakersfield, CA for $13 million or $108,000 per key. The sale price represents a capitalization rate of approximately 7.8% on the hotel’s projected 2016 net operating income, including capital expenditures.
The Company intends to use the proceeds from the sale of these hotels for general corporate purposes, which may include paying down debt and repurchasing shares.
Following the sale of these hotels, the Company owns 122 hotels with approximately 20,100 rooms, located in 21 states and the District of Columbia.
