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SOLD: the recently opened, 148-room
Home2 Suites by Hilton Phoenix Downtown
for $43.3 million or approximately $293,000 per room. |
WEST 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, has acquired
the recently opened, 148-room Home2 Suites by Hilton Phoenix Downtown for
$43.3 million or approximately $293,000 per room.
The
institutional quality, six-story hotel sits in the heart of Downtown Phoenix
and includes the historic Fuller Paint Company Building that houses the hotel’s
customized public spaces, including a signature food & beverage outlet. Upon stabilization, the acquisition is
expected to produce RevPAR in excess of $150 and generate an estimated NOI yield
over 9 percent.
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| Jeffrey H. Fisher |
Downtown Phoenix is a vibrant, 1.7 square miles that
drives incredibly diverse demand for hotels into its urban core. In addition to
the Footprint Center, Chase Field and Convention Center, downtown Phoenix
includes 11.5 million square feet of office space, a 28-acre Bioscience Core
comprised of 1.6 million square feet with plans to essentially double that size
in the coming years, almost 1.0 million square feet of retail space, numerous
museums and theatres and lastly, expanding downtown campuses for Arizona State
University, University of Arizona Medical School and Norther Arizona University
(combined approximately 16,000 students).
“We are really excited about this beautiful, brand new,
high-quality hotel located in the heart of downtown Phoenix, a market in the
early stages of the type of renaissance we have seen occur in other large urban
downtowns across the country over the past decade,” said Jeffrey H. Fisher,
Chatham’s chief executive officer and president.
“Phoenix and Maricopa County-at-large have
benefitted immensely from population growth over recent years. In fact, the
area experienced the largest population growth of any county in the country in
2022.
"Phoenix ranks best in the country for talent
attraction and generally ranks among the top markets in the country for real
estate investment growth and future job growth. The hotel enters a thriving lodging market as Phoenix has
experienced the second highest RevPAR CAGR over the past five years.
"This is the
only Hilton branded extended-stay hotel in downtown Phoenix and will benefit
from the diverse demand generators, all of which are in a high-growth phase.”
Strategically located in the heart of downtown Phoenix,
the Home2 Suites is the closest hotel to the Footprint Center (home to the NBA
Phoenix Suns and WNBA Phoenix Mercury) and Chase Field (home to the Arizona
Diamondbacks), mere blocks from the Phoenix Convention Center and adjacent to
the revitalized Warehouse District that houses numerous upscale event venues,
including the world class On Jackson Events Center, and will also be home to the
under-construction headquarters/practice facility/fan experience for the Suns
and the Mercury. In excess of two million guests visit each of the Footprint Center and Chase Field
annually for sports and entertainment events.
The Convention Center ranks among the top 10 convention
centers in the country and offers nearly 1,000,000 square feet of meeting and
prime exhibition space, including three exhibition halls, two 45,000-plus
square foot ballrooms and an Executive Conference Center.
Fisher highlighted, “This is Chatham’s first acquisition
in more than two years and fits our long-term growth strategy to acquire
younger, premium-branded, high-quality hotels in infill locations with diverse
demand generators.
"The hotel
further diversifies our portfolio by adding an underrepresented geographic area
and also increases our exposure to segments of travelers other than purely
business transient. Selling our Denver Tech hotel for $24 million, inclusive of
deferred renovation costs, at a yield of approximately 4 percent and recycling
that capital into a brand-new asset that will yield over twice that investment
is a great trade for us.
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Denver Tech hotel
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"This hotel will enhance our RevPAR and operating
margins, be accretive to FFO per share, increase distributable cash flow and
enhance shareholder value.”
Chatham funded the purchase using proceeds from the sale
of the Denver Tech hotel in the first quarter and available cash. The hotel
will be managed by Island Hospitality Management, which is owned by Fisher.
CONTACTS:
Dennis Craven
(Company)
Chris Daly (Media)
Chief Operating
Officer DG Public Relations
(561)
227-1386 (703)
864-5553
