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Wednesday, 28 February 2018

RLJ Plans to Sell 26 Hotels Through Next Year

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Commercial Real Estate Direct Staff Report

RLJ Lodging Trust has identified 26 hotels that it is aiming to sell by the middle of next year, as part of an effort to reduce its overall leverage level and dispose of what it considers to be non-core properties.

The Bethesda, Md., REIT had assumed six of the properties, with 2,004 rooms, that are earmarked for sale through its acquisition last year of FelCor Lodging Trust Inc. in a deal valued at $1.2 billion. When it was gearing up to complete that deal, RLJ indicated it would sell properties in order to reduce leverage, which would have increased because of the borrowings that FelCor had carried.

It's already sold two former FelCor hotels with 612 rooms.

In December, it sold the 383-room Fairmont Copley Plaza in Boston for $170 million, or about $443,864/room, to Ashkenazy Acquisition Corp. in a deal brokered by JLL. Deutsche Bank provided some $95 million of financing for the deal. Ashkenazy also owns Faneuil Hall Marketplace and last year bought the office and retail component of the nearby South Station rail hub.

And last week, RLJ sold the 229-room Embassy Suites in the Boston suburb of Marlborough, Mass., for $23.7 million, or about $103,493/room, to Rockbridge Capital of Columbus, Ohio.

The six FelCor properties on the market are the 255-room Embassy Suites in Myrtle Beach, S.C.; the 385-room Hilton, also in Myrtle Beach; the 330-room Knickerbocker in Manhattan; the 309-room Sheraton in Burlington, Vt.; the 364-room Sheraton in Philadelphia, and the 361-room Vinoy Renaissance in St. Petersburg, Fla.

"We are encouraged by the transaction landscape," RLJ chief executive Ross Bierkan told analysts on a conference call this week. "The appetite from buyers and lack of quality product available in the market are driving strong interest in several of our assets."

He said RLJ would use some sales proceeds to fund renovation efforts at other properties it owns, in Los Angeles, San Francisco and Tampa, Fla., which are markets in which it expects to perform well in 2019 and 2020.

"While these investments will cause short-term disruption in 2018, they will enhance the competitive position of our hotels and drive customer preference and pricing," he said.

Comments? E-mail Tim Casey or call him at (267) 397-3347.



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Additional Info

  • Syndicate to Realpoint: No
  • Sector: Hotel & Resort
  • Subject: Property Acquisitions (ACQ), Property Offerings (OFF)
  • Private: No
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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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