BETHESDA, Md.--(BUSINESS WIRE)--RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today announced that the Company has sold the 383-room Fairmont Copley Plaza in Boston, MA (the “Boston Copley”) 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.
Forward Looking Statements
The following information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “plan,” “may,” “will,” “will continue,” “intend,” “should,” “may” or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and the Company’s actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: the current global economic uncertainty, increased direct competition, changes in government regulations or accounting rules, changes in local, national and global real estate conditions, declines in the lodging industry, seasonality of the lodging industry, risks related to natural disasters, such as earthquakes and hurricanes, hostilities, including future terrorist attacks or fear of hostilities that affect travel, the Company’s ability to obtain lines of credit or permanent financing on satisfactory terms, changes in interest rates, access to capital through offerings of the Company’s common and preferred shares of beneficial interest, or debt, the Company’s ability to identify suitable acquisitions, the Company’s ability to close on identified acquisitions and integrate those businesses and inaccuracies of the Company’s accounting estimates. Given these uncertainties, undue reliance should not be placed on such statements. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements and urge investors to carefully review the disclosures the Company makes concerning risks and uncertainties in the sections entitled “Risk Factors,” “Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the SEC.
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