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Chatham Lodging Trust announces multiple hotel investments

Chatham Lodging Trust expands western presence with acquisition of Hyatt Place Denver/Cherry Creek in Colorado, announces agreement to purchase $1.1 billion hotel portfolio in joint venture.

PALM BEACH, FLA. – Chatham Lodging Trust, a hotel real estate investment trust (REIT) focused on investing in upscale, extended-stay hotels and premium-branded, select-service hotels, announced that it has acquired the recently re-opened 194-room Hyatt Place Denver/Cherry Creek for $32 million, or approximately $165,000 per room. In addition, the company has entered into a definitive agreement to acquire, through a joint venture with NorthStar Realty Finance, a $1.1 billion hotel portfolio from Inland American Real Estate Trust. Concurrently, Chatham is negotiating with NorthStar to acquire 4 hotels comprising 575 rooms out of the Portfolio prior to or in connection with the closing of the Portfolio. The Portfolio transactions are expected to close in the fourth quarter of 2014.

Inland American Portfolio Joint Venture Acquisition
The joint venture will be a 90/10 joint venture between NorthStar and Chatham. Island Hospitality, which is 90 percent owned by Jeffrey H. Fisher, Chatham’s president and chief executive officer, is expected to manage 38 of the 52 hotels and Marriott International will manage the remaining 14 hotels in the Portfolio. Chatham would invest approximately $29 million for its 10 percent interest in the joint venture. Characteristics of the Portfolio being acquired by the joint venture include:

  • 52 upscale extended-stay and select-service hotels with 6,976 rooms.
  • Financing expected to be approximately 70-75 percent of the purchase price (including costs).  
  • Predominately affiliated with the Marriott (63 percent) and Hilton (32 percent) brands.
  • Geographically diverse and located across 21 states, including Texas (19 percent), New Jersey (13 percent), New York (10 percent) and North Carolina (10 percent).

“We are excited about expanding our relationship with Northstar through the joint acquisition of another billion dollar portfolio of quality, extended-stay and limited-service hotels,” Fisher highlighted. “The joint venture allows Chatham to leverage its investment dollars into a high yielding off-balance sheet investment and if we can acquire four hotels outright for Chatham, the relationship works very well for all parties and their shareholders.”

Hyatt Place Denver /Cherry Creek Acquisition
Chatham has acquired the 194-room Hyatt Place Denver/Cherry Creek for $32 million, or approximately $165,000 per room. The hotel is located near Cherry Creek, Denver’s premier shopping and restaurant neighborhood, and is approximately five miles from downtown Denver. The hotel is adjacent to the 20-story, 209,000-square-foot Rocky Mountain Tower office building. Previously branded as the Loews Denver Cherry Creek, the hotel closed in 2012 and reopened in October 2013 under the Hyatt Place brand after a multi-million dollar renovation.

“We are delighted to add another high quality hotel in one of the best performing lodging markets in the country, further expanding our presence out west in a city that is expected to see favorable job growth and economic expansion for the foreseeable future,” said Peter Willis, chief investment officer, Chatham Lodging Trust. “The hotel, which sits in an infill location with high barriers to entry, has been fully renovated and is experiencing strong demand growth from both corporate and leisure travelers. Open since October 2013, the hotel is still ramping up and we expect to see demand continue to rise as the hotel gains recognition. We are confident that we will be able to improve the hotel’s market share and profitability since we already own interests in three other hotels in the Denver area.”

According to Smith Travel Research, Denver has been one of the top performing markets in 2014 with RevPAR growth of 16.9 percent through July 2014, ranking it second highest among the top 25 markets in the United States.

The hotel represents Chatham’s second wholly-owned hotel in the Denver area, joining the Hilton Garden Inn in the heart of the Denver Tech Center. Through the Innkeepers joint venture, Chatham also owns interests in two Residence Inns, one in downtown Denver and the other in the Denver Tech Center.

The hotel is located along East Mississippi Avenue at its intersection with Colorado Blvd., one of the busiest intersections in the Denver area. The 194-room hotel caters to business and leisure travelers and is located in close proximity to Infinity Park, Sports Authority Field at Mile High Stadium, and the University of Denver. In addition, the hotel has 3,000 square feet of meeting/event space.

Vicky Karantzavelou
Co-Founder & Chief Editor - TravelDailyNews Media Network | Website

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.

She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.