Chesapeake Lodging Trust (NYSE:CHSP) announced today that it has closed on the sale of the 200-room Hyatt Centric Santa Barbara located in Santa Barbara, California for a sale price of $90.0 million, or $450,000 per key. The Trust used the net proceeds from the sale to repay all outstanding borrowings under its revolving credit facility.
The Trust acquired the Hyatt Centric Santa Barbara in June 2013 for $61.0 million, or $305,000 per key. In April 2016, the Trust sold a separate, five-room villa building and related land parcel at the Hyatt Centric Santa Barbara for $2.1 million to an unrelated buyer. The $90.0 million sale price represents a 5.4% trailing twelve month NOI cap rate (after factoring in a required 2019 renovation estimated at $6.0 million, the sale price represents a 5.0% NOI cap rate) and produced a 15.3% unlevered IRR over the Trust’s ownership period.
Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service hotels in urban settings or unique locations in the United States. The Trust owns 20 hotels with an aggregate of 6,279 rooms in eight states and the District of Columbia.
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