(By Balaseshan) RLJ Lodging Trust (NYSE: RLJ) said it has purchased the 275-room Embassy Suites Boston/Waltham, through an off-market transaction, for $64.5 million, or about $235,000 per key.
The purchase price represents a forward capitalization rate of about 7.9 percent on the hotel's projected 2013 net operating income. The company purchased this asset with cash available on its balance sheet.
The acquisition of this premium-branded hotel is compliant with the company's overall investment thesis. With the addition of this new hotel, the company now owns 145 hotels with more than 21,600 rooms across 21 states and the District of Columbia.
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With more than 37 percent revenue per available room (RevPAR) growth already generated through September, the company expects that this hotel will continue to produce outsized returns due to its recent brand conversion and its prime location within this excellent market.
The hotel went through an extensive $12-million brand conversion from a DoubleTree Guest Suites to an Embassy Suites in 2011, one of only three Embassy Suites in the greater Boston area. During the conversion, the guest suites and the public spaces were also significantly upgraded.
The hotel's prime location in Boston's submarket of Waltham, provides the Hotel with a wide variety of demand generators. Additionally, the hotel's all-suite product is an attractive option to the more than 18 million leisure travelers that visit the greater Boston area annually.
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RLJ is trading down 0.46 percent at $17.33 on Thursday. The stock has been trading between $15.28 and $19.75 for the past 52 weeks.