Chatham Lodging Acquires Residence Inn in Suburban Seattle for $72M
- Nov 04, 2013
Chatham Lodging Trust, of Palm Beach, Fla., has acquired the 231-room Residence Inn by Marriott Seattle Bellevue/Downtown for a net cash price of $71.8 million, plus customary, pro-rated amounts and closing costs, the buyer announced late last week.
The purchase price reportedly represents a forward 12-month cap rate of about 7.8 percent on the hotel’s projected NOI. Chatham funded the purchase with available cash and borrowings on its secured $59 million revolving credit facility.
Year to date through Sept. 30, the hotel’s RevPAR is up 13 percent to $131.
Built in 2008 on a roughly 7-acre site, the hotel features 3,076 square feet of meeting space in three rooms, a heated indoor pool, a fitness center, three levels of covered parking and a Starbuck’s Café.
The property reportedly is the only extended-stay product in downtown Bellevue and benefits from a location with a strong customer base, predominantly in high tech and telecom. Downtown Bellevue has 7.5 million square feet of Class A office space, according to Chatham.
Located alongside I-405, the hotel is less than four miles from Microsoft’s 300-acre corporate park in Redmond and is also within 15 minutes’ drive of downtown Seattle and Seattle-Tacoma International Airport.
In a prepared release, Jeffrey Fisher, Chatham’s CEO, described the hotel as “one of the highest-rated hotels in the Residence Inn by Marriott system, a superior quality property on an urban, infill site in one of the most desirable West Coast corporate markets.”
“This hotel aligns perfectly with our strategy of acquiring coastal area hotels where demand is driven primarily by corporate travelers focused in the ever-growing technology, energy or medical sectors,” Fisher added.
Chatham focuses on upscale, extended-stay hotels and premium branded, select-service hotels.
Peter Willis, Chatham’s chief investment officer, said that the company has long experience in the Seattle market through its ownership of four Residence Inns in a joint venture and through Island Hospitality’s operation of the hotels.
In late 2011, a JV consisting of Chatham and Cerberus Series Four Holdings L.L.C. bought, for more than $1 billion, a 64-hotel portfolio from Innkeepers USA Trust as part of the latter’s Chapter 11 reorganization plan.
The downtown Bellevue hotel is managed by Island Hospitality Management, which is 90 percent owned by Chatham CEO Fisher.
In June, Chatham announced that it would acquire the 178-room Hyatt Place Pittsburgh/North Shore near downtown Pittsburgh, its first property in that city, for $40 million.