The multi-operator real estate investment trust (REIT) -
LaSalle Hotel Properties
) - is on an acquisition spree. Last month, the company acquired
as many as six premium properties in some of the booming U.S.
lodging markets. This comprised three properties each in Florida
and California, with the most recent one being the Florida-assets
buyout. These acquisitions have been financed with borrowings
from LaSalle's senior unsecured credit facility.
Florida Hotels Acquisition
Most recently, LaSalle purchased the Southernmost Hotel
Collection (260-room) - consisting of Southernmost on the
Beach, Southernmost Hotel in the U.S.A. and La Mer Hotel &
Dewey House - in Key West for $184.5 Million. The assets are
located directly in the Atlantic Ocean and are in proximity to
Key West International Airport.
With a year-round temperate climate and low supply growth, the
Key West lodging market is flourishing and has become one of the
major lodging markets of the U.S. According to Smith Travel
Research, Key West registered a compound annual growth rate
(CAGR) of Revenue Per Available Room (RevPAR) of 10% from
2009-2012, compared to 6.8% growth accounted in overall U.S.
industry. Notably, Key West's RevPAR CAGR, over a 25-year span
through 2012, was ranked the second highest among LaSalle's core
California Hotels Acquisition
Moreover, last month, LaSalle acquired three properties -
Serrano Hotel (236-room), Harbor Court Hotel (131-room) and Hotel
Triton (140-room) - in San Francisco for total purchase price of
$119.3 million. All the hotels, which are in proximity to San
Francisco's financial district, continue to be operated by
Kimpton Hotels and Restaurants.
Notably, San Francisco has been emerging as one of the major
lodging industry markets in the U.S., with improving RevPAR and
Average Daily Rate trends.
We remain upbeat about LaSalle's strategic moves that are
aimed at strengthening its portfolio base of luxury and
upper-upscale hotels in high barrier-to-entry markets throughout
the U.S. The company currently owns 11,400 guest rooms in 14
markets across 10 states in the U.S. and the District of
Columbia. The strong portfolio positions it well to ride on the
growth trajectory going forward.
LaSalle presently has a Zacks Rank #3 (Hold). Better
performing REITs include
Hospitality Properties Trust
SL Green Realty Corp
). All these stocks carry a Zacks Rank #2 (Buy).
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