RLJ Lodging Trust (the “Company”) (NYSE:RLJ) today announced that it
acquired two West Coast hotels, the 256-room Courtyard Portland City
Center in Portland, Oregon, and the 293-room Embassy Suites Irvine
Orange County in Irvine, California, in an off-market transaction. The
combined purchase price is $120.0 million, or approximately $219,000 per
key. The purchase price represents a forward capitalization rate of
approximately 7.4% on the hotels’ combined projected 2015 net operating
income.
“This portfolio acquisition is another great example of our ability to
source attractive, off-market opportunities,” commented Thomas J.
Baltimore, Jr., President and Chief Executive Officer. “Both assets
benefit from prime central locations, strong brand affiliations, and
strong operating performance. With the acquisition of these two hotels,
we continue to expand our West Coast presence and upgrade our
portfolio’s overall quality.”
The Company remains selective and disciplined in its pursuit to acquire
assets in markets that will create long-term shareholder value. The
hotels' 2013 aggregate revenue per available room (“RevPAR”) is greater
than $116, which is approximately a 10% premium to RLJ’s reported 2013
RevPAR.
The Portland area’s diverse and growing economy has a broad base of
technology, apparel, and advanced manufacturing companies. Intel, Nike,
and Oregon Health & Science University, which are some of the area’s
largest and most well-known demand generators, are all undergoing
large-scale expansion in the area. The Portland area also offers a
multitude of tourist attractions such as world-renowned markets, shops,
and eating and drinking establishments. Furthermore, the Oregon
Convention Center, which is the largest convention center in the Pacific
Northwest, is located in downtown Portland and generates healthy group
demand for area hotels.
The custom-designed Courtyard Portland City Center’s prime location in
the heart of downtown Portland enables the hotel to benefit from
corporate, group, and leisure demand generated throughout the city.
Downtown Portland’s relatively high barriers to entry are expected to
limit new hotel supply and promote positive long-term lodging
fundamentals. We expect that the hotel is well positioned to capitalize
on these positive fundamentals and will continue to perform strongly.
The city of Irvine is located in the center of southern California’s
Orange County. Irvine has a diverse mix of high-density office,
commercial, and residential properties. Irvine is home to major
employers in the education, life sciences, software, and advanced
manufacturing industries including the University of California Irvine,
Broadcom Corporation, and Allergan Inc. Furthermore, Google currently
has under construction a 109,000 square foot build-to-suit office
building that is expected to be completed by second quarter 2014. The
city of Irvine is also known as a family-friendly destination with a
variety of recreational, entertainment, shopping, and sports facilities.
The upscale, all-suite Embassy Suites Irvine Orange County hotel is
located less than one mile from the John Wayne Airport. The hotel is
located in the largest office submarket in Orange County. With over 22
million square feet of office space and over 24 million square feet of
industrial space within close proximity, the hotel benefits from a
stable supply of corporate demand. The hotel’s all-suite product is also
an attractive option for leisure travelers given the close proximity to
some of the area’s top leisure destinations including Disneyland, the
iconic local beaches of Huntington Beach and Laguna Beach, and the
area’s various sporting events.
We expect that both hotels will continue to benefit from strong local
market conditions and positive lodging fundamentals. In 2013, the
Portland and Irvine markets both outperformed overall U.S. RevPAR
growth, as reported by Smith Travel Research, and we expect both markets
will continue to perform well and generate additional positive growth in
2014 and beyond.
The transaction was funded with cash available on the Company’s balance
sheet and its revolving credit facility. The Company expects to use
proceeds from the Company’s recently announced follow-on offering to
subsequently repay its revolving credit facility.
With the addition of these two hotels, the Company now owns 148
properties, consisting of 146 hotels with approximately 23,000 rooms,
and two planned hotel conversions located in 21 states and the District
of Columbia.
About Us
RLJ Lodging Trust is a self-advised, publicly traded real estate
investment trust focused on acquiring premium-branded, focused-service
and compact full-service hotels. Additional information may be found on
the Company’s website at http://rljlodgingtrust.com.
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.
For additional information or to receive press releases via email,
please visit our website:
http://rljlodgingtrust.com
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