In order to ensure a smooth progress of its capital recycling
RLJ Lodging Trust
) divested a portfolio of 11 hotels for about $85.0 million. The
selling price of the assets signifies a roughly 7.9%
capitalization rate on the assets' expected net operating income
in 2013, which is adjusted for awaiting capital expenditures of
around $23.0 million.
Following the announcement, this real estate investment trust
(REIT) hit a new 52-week high of $25.99 towards the end of the
trading session on NYSE on Friday, Feb 21, 2014.
Of the 11 offloaded assets, 3 properties are based in Texas
and Colorado each, 2 are in Indiana and 1 each in Florida,
Michigan and Nevada. These assets are Courtyard Austin University
Area, Fairfield Inn & Suites Austin University Area, Hyatt
House Dallas Richardson, Hyatt House Colorado Springs, Courtyard
Denver Southwest Lakewood, Residence Inn Denver Southwest
Lakewood, Residence Inn Indianapolis Airport, Fairfield Inn &
Suites Indianapolis Airport, SpringHill Suites Gainesville,
Courtyard Grand Rapids Airport and Hampton Inn & Suites Las
Vegas / Summerlin.
These are non-strategic assets, selected by the company on the
basis of their low earnings before interest, taxes, depreciation,
and amortization (EBITDA) contribution, which represented less
than 3.0% of RLJ Lodging's estimated 2013 pro forma hotel
RLJ Lodging anticipates this disposition to enhance its
Revenue Per Available Room and U.S. portfolio base. Moreover, the
company plans to redeploy the sales proceeds for investing in
acquisitions of premium assets like the company's 10-hotel
portfolio deal penned earlier this month.
In particular, RLJ Lodging disclosed an agreement with the
Hyatt Hotels Corp.
) for the acquisition of a 10-hotel portfolio for around $313
million. The transaction, which is anticipated to be accomplished
in Mar 2014, would help RLJ Lodging to strengthen its presence in
the West Coast and leverage on the growing fundamentals.
RLJ Lodging is expected to report its fourth quarter and full
year results on Feb 26, 2014, after the closing bell. The
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, stands at 0.00%. This
along with the Zacks Rank #3 makes surprise prediction
Investors interested in the REIT industry may consider stocks
Sabra Health Care REIT, Inc.
Winthrop Realty Trust
). Both these stocks carry a Zacks Rank #1 (Strong Buy).
WINTHROP REALTY (FUR): Free Stock Analysis
HYATT HOTELS CP (H): Free Stock Analysis
RLJ LODGING TR (RLJ): Free Stock Analysis
SABRA HEALTHCR (SBRA): Free Stock Analysis
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