RLJ Lodging Trust (RLJ) disclosed the re-opening of a property – Residence Inn Atlanta Midtown/Georgia Tech – after an extensive refurbishment. The move is aimed at boosting the overall portfolio quality of this lodging real estate investment trust (REIT).
Residence Inn Atlanta Midtown/Georgia Tech is situated in the center of Midtown Atlanta. As per the refurbishment plan, RLJ Lodging added 12 rooms and enhanced all the guestrooms and public spaces of the asset, with an investment of $8.0 million. The company anticipates this investment to represent a forward capitalization rate of around 10%, which is based on net operating income generated by the property in 2015. Notably, after the abovementioned renovation, Residence Inn Atlanta Midtown maintained its branding under Residence Inn brand of Marriott International, Inc. (MAR).
We view this transaction as strategic fit for RLJ Lodging, given the geographical location of the property and renowned brand name. As a matter of fact, Atlanta market mainly draws benefits from the business travelers as it boasts of the presence of several industry leading companies such as Delta Air Lines, Inc. (DAL) and The Coca-Cola Company (KO). Also, the region gets gains from demand generated by leisure tourists due to presence of entertainment attractions such as High Museum of Art and Fox Theatre. Hence, this opportunistic move will boost the top line growth of RLJ Lodging, going forward.
RLJ Lodging currently has 150 properties, which consists of 148 hotels with over 23,000 rooms and two planned hotel conversions. The properties are situated in 21 states and the District of Columbia.
RLJ Lodging currently carries a Zacks Rank #2 (Buy).
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