RLJ Lodging Trust Hungry for Food-less Limited-Service Hotels
Washington Post reports: Over the past decade, private Bethesda, MD-based RLJ Development had become one of the largest US hotel owners, amassing a portfolio of 20,400 rooms spanning 19 states. And according to the Washington Post, remarkably the majority of those deals were closed through limited-bid or off-market transactions, likely through hand-made deals arranged by the firm’s two well-connected principals; Robert L Johnson and Thomas J Baltimore Jr.
After going public in 2010 and using the $495 million raised in its IPO to half its debt obligations, the firm – now called RLJ Lodging Trust – intends to gorge itself on more than $400 million in hospitality properties over the next 12 months. To fill out this goal, the firm will continue to use its tried-and-true strategy of pursuing limited-service hotels that often yield higher revenue per room, and operate under a leaner structure.
According to Real Capital Analytics’ Ben Carlos Thypin, however, the firm’s plan may run up against some current market realities. RCA tracked just $372 million in limited-service hotel sales during the first quarter of 2011, down by 14% from one year ago, and Mr Thypin added that, “Pricing hasn’t dropped enough to make some of these deals attractive. . . There are some lingering risks in the niche. Supply is mostly located in second-tier markets and demand is heavily reliant on the health of the business travel market.”
View the full article on Washington Post: RLJ Lodging Trust Hungry for Food-less Limited-Service Hotels
Articles related to this topic:
Yield-Hungry Investors Scoping Secondary Markets
Don't Celebrate Yet: Hundreds of Markets Beyond New York Still in Trouble
Latest Indicator of CRE Market's Health: Moody's Pricing Index Hits New Low
Chinese Investors Cutting Deals in Toledo, OH
Surprising Players Pursuing Industrial Sector for Higher Yields
Manhattan's Newly-Renovated Algonquin Hotel Trades Hands
Manhattan's Paramount Hotel Trades as Summer Tourist Season Begins
At $526k Per Room, Pebblebrook's Latest Trade Indicative of Hotel Market's Momentum
Posted by: Nina Turner