194-room hotel valued at $255,000 per key.
RLJ Lodging Trust Tuesday announced that it has acquired the 194-room Hyatt Atlanta Midtown at a purchase price of $49.5 million, or approximately $255,000 per key.
“We are excited to add this newly renovated asset to our portfolio and continue to expand our relationship with Hyatt,” Thomas J. Baltimore, Jr., president and CEO of RLJ, said in the announcement.
“The purchase of the Hotel is immediately accretive to our portfolio and its central location in Midtown Atlanta, one of the most dynamic markets in the Southeast, will position it for exceptional growth.”
The purchase price represents a forward capitalization rate of approximately eight percent on the hotel’s projected 2015 net operating income, according to the announcement. The Company purchased the Hotel with proceeds from its recent equity offering.
Originally opened in 1987 as a Wyndham, the hotel was closed by the prior owner to perform a $23 million renovation and conversion to a compact full-service Hyatt.
The Hotel re-opened in July 2013. The Company projects that during its first year of full ownership, the Hotel’s revenue per available room (“RevPAR”) will be more than a 16 percent premium to the Company’s reported 2013 RevPAR.
The Hotel is the only Hyatt branded hotel in Midtown, a submarket known for its urban, high-density office, commercial, and residential settings.
With the addition of this asset, the Company now owns 149 properties, comprised of 147 hotels with more than 23,100 rooms and two planned hotel conversions, located in 21 states and the District of Columbia.
Not to be overly pedantic but isn’t the “per-key” metric a bit misleading? It’s basically just the $50M/194Rms, so why not per room? Because a room can have multiple keys and be keyed into hundreds of times or more a year…