Deutsche Bank (DB) raised its price target on shares of LaSalle Hotel Properties (NYSE:LHO) to $25.50 from $25, while maintaining its "Hold" rating.
LHO announced the acquisition of the Hotel Palomar in Washington D.C. in an off-market transaction, and raised 2012 guidance. LHO is paying for $143.8 million, or $429,000/key, using its credit line and $46.6 million of proceeds from the ATM program.
For fiscal 2012, the company lifted its adjusted funds from operations outlook to range of $2.00 to $2.12 per unit from previous forecast of $1.92 to $2.05 per share, while Street analysts predict $2.04 per share.
At a 6.6% trailing cap rate, the brokeage views pricing favorably for a full service hotel in a major gateway market. The inauguration in 2013 should lead to solid top line growth. LHO will also look for cost synergies with its other CBD DC hotels.
LaSalle Hotel Properties, a real estate investment trust (REIT), engages in the purchase, ownership, redevelopment, and leasing of primarily upscale and luxury full-service hotels in convention, resort, and urban business markets in the United States. It owns 34 hotels, totaling about 9,200 guest rooms in 15 markets in 11 states and the District of Columbia.
LHO is trading up 2.19% at $27.06 on Tuesday.