BETHESDA, Md.—RLJ Lodging Trust (the “Company”) announced that it acquired the 275-room Embassy Suites Boston/Waltham (the “Hotel”), through an off-market transaction, for a purchase price of $64.5 million, or approximately $235,000 per key. The purchase price represents a forward capitalization rate of approximately 7.9 percent on the hotel’s projected 2013 net operating income. The Company purchased this asset with cash available on its balance sheet.
“We are excited to enter the Boston market, one of the strongest performing RevPAR hotel markets in the country,” commented Thomas J. Baltimore, Jr., president and chief executive officer, in an announcement. “This hotel’s recent conversion to an Embassy Suites has positioned this centrally-located asset for exceptional growth.”
The Hotel went through an extensive $12-million brand conversion from a DoubleTree Guest Suites to an Embassy Suites in 2011, one of only three Embassy Suites in the greater Boston area. During the conversion, the guest suites and the public spaces were also upgraded.
The strength of this newly upgraded hotel in Boston’s Waltham submarket is evident by the performance it has generated in 2012. With more than 37 percent RevPAR growth already generated through September, the Company expects that this hotel will continue to produce outsized returns due to its recent brand conversion and its location.
The acquisition of this premium-branded hotel is compliant with the Company’s overall investment thesis. With the addition of this new hotel, the Company now owns 145 hotels with more than 21,600 rooms across 21 states and the District of Columbia.