Chesapeake Lodging Trust entered into an agreement to sell two New York City hotels—the 122-room Hyatt Herald Square New York and the 185-room Hyatt Place New York/Midtown-South—for an aggregate sale price of $138 million. The trust anticipates the sale will occur in mid-to-late September, prior to the completion of its proposed merger with Park Hotels & Resorts.
The lodging real estate investment trust acquired the Hyatt Herald Square New York in December 2011 for $52.0 million, or $428,000 per key. It bought the Hyatt Place New York Midtown South in March 2013 for $76.2 million, or $412,000. The proposed sales price, which comes out to approximately $450,000 per key, represents a 5.9 percent trailing-12-month net operating income cap rate.
Hyatt Herald Square New York includes a rooftop bar, a lobby restaurant and bar, a fitness center, a business center and a grab-and-go market. Five blocks north, Hyatt Place New York/Midtown-South features a bar, fitness center, business center and grab-and-go market.
Park and Chesapeake’s boards both agreed to a merger earlier this year. If approved, Park would acquire Chesapeake for $2.7 billion. The terms of the agreement accounted for Chesapeake’s sale of the two Hyatt hotels, as well as three non-core Park hotels. The merger remains subject to the approval of Chesapeake’s shareholders and completion of other customary requirements and conditions. A special meeting to consider and vote upon the proposed merger has been scheduled for Sept. 10.
Chesapeake owns 20 hotels which together represent 6,288 rooms. Its properties are spread across eight states and the District of Columbia.