Chatham Lodging Trust (CLDT), a lodging real estate investment trust (REIT), inked a deal to acquire a Pa.-based property – Hyatt Place Pittsburgh/North Shore – for $40 million (including customary pro-rated amounts and closing costs). The move marks the company’s efforts to spread its presence in high-end markets and thereby strengthen its overall portfolio.
Founded in Dec 2010, Hyatt Place Pittsburgh comprises 178 rooms and is situated in North Shore neighborhood. The hotel is in proximity to famous local attractions such as Carnegie Science Center, River Casino, PNC Park and Heinz Hall.
Moreover, Hyatt Place Pittsburgh is close to offices of Fortune 500 business giants – including PPG Industries Inc. (PPG), PNC Financial, Alcoa Inc. (AA), International Business Machines Corporation (IBM) and U.S. Steel. Its strategic location makes it desirable for both business and leisure travelers.
Post-acquisition, the property will be managed by Island Hospitality Management. The acquisition is expected to close by Jun 17, 2013, subject to customary closing conditions. This strategic buyout is a quality addition to Chatham’s portfolio of upscale extended-stay and premium branded select-service hotels in some of the most attractive markets in the U.S. We expect the property to generate a steady source of revenues going forward and strengthen its top-line growth.
However, on a separate development, Chatham stated that it has decreased its revenue per available room (RevPAR) guidance for second-quarter 2013. This reflects the company’s expectation of RevPAR being further impacted by renovations, concerning the rebranding of the Wash.-based former Doubletree Guest Suites hotel to Residence Inn by Marriott.
Based on this, Chatham now expects RevPAR to increase in the range of $114–$115 (previously $116–$118). Moreover, the company lowered its RevPAR growth guidance range to +2–3% (previously +4–5%). As matter of fact, Chatham expects the renovation to conclude in the third quarter of 2013.
Chatham currently carries a Zacks Rank #3 (Hold).
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