Chatham Lodging Trust
), a lodging real estate investment trust (REIT), inked a deal to
acquire a Pa.-based property - Hyatt Place Pittsburgh/North Shore
- for $40 million (including customary pro-rated amounts and
closing costs). The move marks the company's efforts to spread
its presence in high-end markets and thereby strengthen its
Founded in Dec 2010, Hyatt Place Pittsburgh comprises 178
rooms and is situated in North Shore neighborhood. The hotel is
in proximity to famous local attractions such as Carnegie Science
Center, River Casino, PNC Park and Heinz Hall.
Moreover, Hyatt Place Pittsburgh is close to offices of
Fortune 500 business giants - including
PPG Industries Inc.
), PNC Financial,
International Business Machines Corporation
) and U.S. Steel. Its strategic location makes it desirable for
both business and leisure travelers.
Post-acquisition, the property will be managed by Island
Hospitality Management. The acquisition is expected to close by
Jun 17, 2013, subject to customary closing conditions. This
strategic buyout is a quality addition to Chatham's portfolio of
upscale extended-stay and premium branded select-service hotels
in some of the most attractive markets in the U.S. We expect the
property to generate a steady source of revenues going forward
and strengthen its top-line growth.
However, on a separate development, Chatham stated that it has
decreased its revenue per available room (RevPAR) guidance for
second-quarter 2013. This reflects the company's expectation of
RevPAR being further impacted by renovations, concerning the
rebranding of the Wash.-based former Doubletree Guest Suites
hotel to Residence Inn by Marriott.
Based on this, Chatham now expects RevPAR to increase in the
range of $114-$115 (previously $116-$118). Moreover, the company
lowered its RevPAR growth guidance range to +2-3% (previously
+4-5%). As matter of fact, Chatham expects the renovation to
conclude in the third quarter of 2013.
Chatham currently carries a Zacks Rank #3 (Hold).
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