PALM BEACH, FL —Chatham Lodging Trust (NYSE: CLDT), a hotel
real estate investment trust (REIT) focused on investing in upscale
extended-stay hotels and premium-branded select-service hotels, today announced
several key events related to its 10.3 percent interest in a joint venture with
affiliates of Cerberus Capital Management.
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| Dennis M. Craven |
The joint venture was formed to acquire most of the former
Innkeepers USA Trust hotel portfolio out of bankruptcy in October 2011.
The joint venture recently refinanced its existing debt with
a new $950 million, non-recourse loan with JPMorgan Chase Bank, National
Association. Collateralized by the remaining 51, core hotels in the Innkeepers
portfolio, the new, five-year, interest only loan, which is comprised of a
two-year loan with three, one-year extension options, carries an interest rate
of one month LIBOR plus 480 basis points.
The previous loans
carried an average interest rate of approximately 6.74 percent. In connection
with the loan closing, the joint venture pre-funded approximately $52 million
of capital expenditures related to future renovations at the joint venture’s
hotels and $5 million of other customary, lender required reserves.
“When the Innkeepers acquisition closed in late 2011, the
joint venture assumed a $675 million, fixed rate, long-term loan, and we
negotiated a key provision that allowed us to repay the loan anytime without
prepayment penalty or defeasance,” said Dennis Craven, Chatham’s chief
financial officer.
“Since closing the
Innkeepers acquisition, the value of the joint venture portfolio has risen
significantly, and we were able to opportunistically refinance all of the joint
venture’s $786 million of debt, reducing the joint venture’s interest costs by
approximately $5.5 million per year based on current LIBOR rates, extending the
maturity of the Innkeepers portfolio debt to 2018 and pre-funding a significant
amount of capital expenditures.”
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| Jeffrey H. Fisher |
“We seized upon the unique opportunity to acquire the
Innkeepers portfolio at a great price, confirmed by the fact that the joint
venture has returned approximately 90 percent of our original investment less
than two years from acquisition,” highlighted Jeffrey H. Fisher,
Chatham’s chief executive officer.
“We estimate the joint venture portfolio value today to be
approximately $1.3 billion. With
industry experts predicting healthy RevPAR and earnings growth in the coming
years, we are thrilled with the potential value of our promoted interest which
we believe can increase our share of cash flow from the current 10.3 percent to
more than 20 percent if certain returns are achieved.”
For a complete copy of the company’s news release,
please contact:
Jerry Daly
Daly Gray Public Relations
(Media)
(703) 435-62
Dennis Craven
Chief Financial Officer
(Company)
(561) 227-1386
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