Chatham Lodging Trust sold two western Pennsylvania hotels, the 105-room Courtyard by Marriott Altoona and the 86-key SpringHill Suites by Marriott Pittsburgh Washington, for $10 million. Inclusive of brand required improvements of more than $4 million, the real estate investment trust sold the properties at around 6 percent net operating income capitalization rate (after an assumed annual capital reserve of 4 percent of total hotel revenues).
“We acquired these smaller hotels as part of a portfolio purchase in 2010, and the hotels had a pretty good run for five years, but no longer meet our long-term investment strategy,” Jeffrey H. Fisher, Chatham’s CEO and president, said in a statement. “These two non-core hotels, in very small markets and with combined [revenue per available room] of $65, do not match the overall quality of our portfolio. Excluding the sold hotels, our comparable portfolio RevPAR increases to $135 from $133.”
Chatham Lodging Trust estimated the hotels would have contributed around $1 million of earnings before interest, taxes, depreciation and amortization in 2019. The company will use net proceeds from the sale to reduce borrowings on its unsecured credit facility.