Chatham Lodging Trust (NYSE: CLDT), a hotel real estate investment trust (REIT) focused on investing in upscale extended-stay hotels and premium branded select-service hotels, today announced that it has completed its acquisition of the 178-room Hyatt Place ® Pittsburgh/North Shore in Pittsburgh, Pa., for a purchase price of $40 million, plus customary pro-rated amounts and closing costs.
The Pittsburgh Hyatt Place opened in December 2010 and is located in Pittsburgh’s North Shore neighborhood, next door to PNC Park (home of the Pittsburgh Pirates) and Heinz Field (home of the Pittsburgh Steelers), and near such attractions as the Andy Warhol Museum, the Carnegie Science Center and the National Aviary. The Pittsburgh Hyatt Place also is proximate to Fortune 500 employers such as Alcoa, Del Monte Foods, PNC Financial, U.S. Steel and Heinz.
“This is a stunning, high quality hotel in a fantastic location in downtown Pittsburgh and represents our first Hyatt branded hotel in the Chatham portfolio,” said Jeffrey H. Fisher, Chatham’s chief executive officer. “We source the majority of our acquisitions privately, which improves pricing and enables us to pass on incremental value to our shareholders. This acquisition aligns perfectly with our strategy of acquiring premium–branded, upscale extended stay and select-service hotels in high demand markets that command high daily rates and revenue. Average daily rate at the Pittsburgh Hyatt place is expected to be approximately $163 in 2013, well above our current portfolio rate, and we expect to improve the operating performance of the hotel in 2013 with better revenue and profit performance.”
The Pittsburgh Hyatt Place is managed by Island Hospitality Management (IHM), which is 90 percent owned by Fisher. Chatham funded the purchase with borrowings on its secured revolving credit facility and a $24.2 million fixed rate, first-mortgage loan. The 10-year loan was provided by Barclays Bank, plc. The loan carries a fixed interest rate of 4.65 percent per annum, with principal and interest based on a 30-year amortization.