RLJ Lodging Trust (NYSE: RLJ) last week announced that the Company has sold the 383-room Fairmont Copley Plaza in Boston, MA for $170.0 million or approximately $444,000 per key.
“We are pleased by the execution of the sale of this iconic asset at a very attractive valuation that is significantly accretive to our shareholders across a number of metrics. The disposition of this asset is consistent with our objectives of selling non-core assets and unlocking shareholder value,” commented Ross H. Bierkan, President and Chief Executive Officer. “Our ability to sell this asset shortly after closing the merger highlights the team’s focus on executing our key priorities in a disciplined manner. We remain committed to our disposition strategy, and we look forward to announcing further asset sales as they materialize.”
The sale price represents approximately a 4.6% capitalization rate on the hotel’s 2017 projected net operating income. The sale price, which is accretive to the Company’s implied EBITDA multiple, represents a hotel EBITDA multiple of approximately 16.5x based on the hotel’s 2017 projected hotel EBITDA.
Additionally, the sale of this hotel is accretive to the Company’s hotel EBITDA margin. The 2016 hotel EBITDA margin of this hotel was almost 50% lower than the newly combined portfolio’s pro forma average in 2016.
The Company intends to use the net proceeds from the sale for general corporate purposes, with a focus on paying down debt.
RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust focused on acquiring premium-branded, focused-service and compact full-service hotels. The Company’s portfolio consists of 157 hotels with approximately 30,800 rooms located in 26 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.
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