Chatham Lodging Trust, a hotel real estate investment trust focused on investing in upscale, extended-stay hotels and branded, select-service hotels, acquired the recently opened 167-room Courtyard by Marriott Downtown Dallas for $49 million, or approximately $293,000 per room. The hotel opened in September 2018.
Chatham funded the purchase using available cash, including $24 million of proceeds from equity issued under its share plans in 2018 and borrowings on its unsecured credit facility. The hotel will be managed by Island Hospitality Management, which is 51-percent owned by Jeffrey H. Fisher, Chatham’s CEO and president.
“This is a gorgeous, brand new, superior-quality hotel located just two blocks from the Kay Bailey Hutchison Convention Center in the heart of downtown Dallas,” Fisher said in a statement. “This is the first new-build hotel in downtown Dallas since 2011 and will carry a competitive advantage over nearby select-service hotels, which are entirely adaptive reuse or conversion projects. The area has experienced a revival since 2010, with over $5 billion of real estate investments generating a 23 percent increase in downtown population, as well as an increase in corporate office demand. This hotel expands our Dallas presence and allows us to leverage our market knowledge and Island Hospitality’s deep talent pool to generate strong returns.”
The Courtyard by Marriott Dallas Downtown is a 12-story tower consisting of guestroom floors situated on top of the lobby and parking garage. The hotel has approximately 3,500 square feet of meeting space on the 12th floor that sits adjacent to a rooftop restaurant and bar.
“We are very picky when assessing acquisition opportunities, and this hotel fits our long-term growth strategy to acquire younger, premium-branded, high-quality hotels in infill locations with diverse demand generators. The top-floor meeting space and rooftop restaurant/bar provide something unique to downtown Dallas and give us a tremendous asset to generate incremental business from a variety of sources,” Fisher said. “Having owned hotels in Dallas for a long time, the downtown area was forgotten for awhile, but over the past six years, really has experienced a renaissance. This hotel is well-positioned to benefit from the significant growth that is expected to continue in downtown Dallas.”