Chatham Lodging Trust (NYSE: CLDT), a hotel real estate investment trust (REIT) focused on investing in premium-branded, select-service hotels, and affiliates of Cerberus Capital Management, LP, a private investment firm, have completed the acquisition of 64 hotels from affiliates of Innkeepers USA Trust.
The joint venture between Cerberus and Chatham acquired the 64 hotels, aggregating 8,329 rooms, for a total gross purchase price of approximately USD1.02 billion, including the assumption of approximately USD675 million of mortgage debt on 45 of the hotels with a weighted average interest rate of 6.71 per cent and maturing in 2017. The other 19 hotels are unencumbered. The purchase price per room, net of cash reserves, was approximately USD118,000 per room/suite.
Chatham owns an approximate 10.3 per cent interest in the joint venture and funded its USD37 million investment in the joint venture with borrowings under its senior secured revolving credit facility. Chatham will provide certain asset management services to the joint venture and will receive a promote interest based on meeting certain return thresholds. All costs of operating the joint venture will be paid by the joint venture.
All but one of the 64 acquired hotels will continue to be managed by Island Hospitality Management, a hotel management company that is 90 per cent owned by Jeffrey H Fisher (pictured), Chatham’s chief executive officer and president.
