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 acquired the 131-room Hilton Garden Inn
Portsmouth Downtown in N.H., for $43.5 million, or approximately
$332,000 per room.
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Hotel in Historic Downtown Portsmouth,
N.H. (Photo: Business Wire)
“This gorgeous property is located in the absolute center of
downtown Portsmouth, a beautiful, historic, waterfront community,
and is a perfect complement to the Chatham portfolio,” said Jeffrey
H. Fisher, Chatham’s chief executive officer and president. “The
hotel enjoys the best location within downtown Portsmouth and
benefits from strong, diversified demand arising from a great
combination of leisure, corporate and government business related
to a thriving naval yard.
“Portsmouth is an extremely high barrier-to-entry market, and
the city has done a fantastic job balancing growth and maintaining
the integrity of this historic community,” he noted. “Portsmouth
has enacted sweeping changes to zoning codes, which makes
permitting and development even more stringent and highly
problematic for new supply wanting to enter the downtown
market.
“We have a long, highly successful track record acquiring hotels
in the upper Northeast corridor. Our knowledge and presence in the
region greatly aided our diligence process and underwriting. Since
acquisition, our Hampton Inn & Suites Portland, Maine has been
one of our best performing assets and we believe the Portsmouth
market, on a similar trajectory as Portland, also will be a strong
performer,” Fisher concluded.
Opened in June 2006, the Hilton Garden Inn Portsmouth Downtown
was fully renovated within the past two years and will require no
major capital investment until 2022. The hotel was constructed with
a timeless design that adheres to strict local requirements and
fits well with the city’s historic charm.
Downtown Portsmouth is one of the region’s most popular tourist
destinations, owing to its distinctive architecture, riverfront
location and extensive array of retail and restaurant facilities. A
one-hour drive from Boston, Mass., and Manchester, N.H., downtown
Portsmouth is a thriving tourist destination with a confluence of
natural seaside beauty, historic architecture and a walkable
downtown with more than 75 restaurants, an active brewery scene and
a booming arts and theater scene. Portsmouth has been lauded as a
great travel destination by the likes of Travel and Leisure, The
Boston Globe, The New York Times and the Chicago Tribune.
Located less than two miles from the hotel across the harbor,
Pease International Tradeport, a former air force base, is a
world-class office and industrial park encompassing 3,000 acres and
home to approximately 250 companies employing more than 10,000
people. The Tradeport is diverse with high-tech, bio tech,
manufacturing, R&D and import/export companies, including seven
Fortune 500 and 14 international businesses. Occupying 4 million
square feet of space, major corporations, including Ingersoll Rand,
Lonza Biologics, Fisher Scientific, Sig Sauer and Sprague Energy,
are located in this vast corporate community. Additionally,
companies such as Timberland, Liberty Mutual and Bottomline
Technologies have a substantial presence in the Portsmouth
area.
Portsmouth Naval Shipyard is the U.S. government’s oldest,
continuously operating naval shipyard. It is the largest regional
employer, with almost 7,000 people after adding 650 positions in
2016 and approximately 500 more in 2017. The U.S. Navy recently
received approval to expand its current fleet of 275 deployable
ships to 355 over the next decade, which will further spur job and
economic growth at the shipyard and the regional economy.
“Whether it is hotels we own or hotels Island Hospitality
operates, we have a significant presence in this area of the
country,” highlighted Dennis Craven, Chatham’s chief operating
officer and executive vice president. “We own a Hampton Inn and
Suites in nearby Exeter, N.H., and Island Hospitality operates a
Homewood Suites within Portsmouth. Having three Hilton-branded
hotels in the market will position us to maximize room pricing and
provide us with economies of scale to optimize profitability.
“As we pointed out in our second quarter earnings release, we
constantly seek to enhance, and ultimately grow, our investment
portfolio through opportunistic recycling. We remain under contract
to sell two hotels which we expect to close within the next 60
days. This acquisition reinvests a portion of those proceeds into a
hotel that is younger, yields higher cash-on-cash returns and
increases our portfolio RevPAR given its projected 2017 RevPAR of
$163. The property’s projected RevPAR growth is higher than the
hotels we are selling, as well as our overall portfolio RevPAR
growth. Once proceeds from asset sales are fully reinvested, we
expect these transactions to be accretive to our net asset value
and FFO per share,” Craven said.
Chatham funded the purchase through available cash and
borrowings on its revolving credit facility. The hotel will be
managed by Island Hospitality Management, which is 51 percent owned
by Fisher. Chatham estimates it acquired the property at a year one
net operating income capitalization rate of approximately eight
percent.
About Chatham Lodging Trust
Chatham Lodging Trust is a self-advised, publicly-traded real
estate investment trust focused primarily on investing in upscale
extended-stay hotels and premium-branded, select-service hotels.
The company owns interests in 134 hotels totaling 18,341
rooms/suites, comprised of 39 properties it wholly owns with an
aggregate of 5,843 rooms/suites in 15 states and the District of
Columbia and a minority investment in two joint ventures that own
95 hotels with an aggregate of 12,498 rooms/suites. Additional
information about Chatham may be found at www.chathamlodgingtrust.com.
This press release may contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995 about Chatham Lodging Trust, including statements regarding
future plans, strategies, performance, acquisitions, capital
expenditures, future operating results and the timing and
composition of revenues, among others, and statements containing
words such as “expects,” “believes” or “will,” which indicate that
those statements are forward-looking. Except for historical
information, the matters discussed in this press release are
forward-looking statements that are subject to certain risks and
uncertainties that could cause the actual results or performance to
differ materially from those discussed in such statements.
Additional risks are discussed in the company’s filings with the
Securities and Exchange Commission.
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Chatham Lodging TrustDennis Craven, (Company), 561-227-1386Chief
Operating Officer
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