BETHESDA, Md.--(EON: Enhanced Online News)--RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today announced that it has sold two hotels (the “Hotels”) in New York City for $286 million or $494,500 per key. Separately, the Company sold one other hotel in Bakersfield, CA for $13 million.
“While we continue to believe in the New York City market over the long-term, in the near-term these sales reduce our exposure as this market goes through a soft period.”
“We capitalized on the strong interest from international investors in the New York City market to execute an opportunistic transaction,” commented Ross H. Bierkan, President and Chief Executive Officer. “While we continue to believe in the New York City market over the long-term, in the near-term these sales reduce our exposure as this market goes through a soft period.”
On December 5, 2016, the Company sold the 298-room Hilton Garden Inn New York/West 35th Street and the 280-room Hilton New York Fashion District in Manhattan. The sale price represents a capitalization rate of approximately 4.7% on the Hotels’ projected 2016 net operating income, including planned capital expenditures. The sale of the Hotels reduces the share of the Company’s Pro forma 2016 Hotel EBITDA from the New York City market to less than five percent.
Additionally on November 30, 2016, the Company also sold a 119-room non-core hotel in Bakersfield, CA for $13 million or $108,000 per key. The sale price represents a capitalization rate of approximately 7.8% on the hotel’s projected 2016 net operating income, including capital expenditures.
The Company intends to use the proceeds from the sale of these hotels for general corporate purposes, which may include paying down debt and repurchasing shares.
Following the sale of these hotels, the Company owns 122 hotels with approximately 20,100 rooms, located in 21 states and the District of Columbia.
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 owns 122 hotels with approximately 20,100 rooms, located in 21 states and the District of Columbia.
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,” 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 urges 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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