2022-08-01 | NYSE:RLJ | Press release

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RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today announced that it has acquired the fee simple interest in the 124-room 21c Museum Hotel Nashville (the “Hotel”) for a purchase price of $59 .0 million, or about $476,000 per key. The property was converted into a lifestyle hotel in 2017, following the transformational conversion of the historic Gray & Dudley building in downtown Nashville, Tennessee.

This press release is multimedia. View the full press release here: https://www.businesswire.com/news/home/20220801005249/en/

Exterior of 21c Museum Hotel Nashville (Photo: Business Wire)

“We are delighted to acquire this unique, high-quality hotel located in one of the most dynamic and long-term growth markets in the country,” commented Leslie D. Hale, President and CEO. “Nashville is a booming destination that is poised to outperform through this cycle and this property is well positioned to benefit from these growth trends, given that it is located in the heart of demand, in the Nashville’s downtown arts district. This acquisition underscores our disciplined and focused approach to executing off-market transactions.” Ms. Hale continued, “In addition, we took advantage of the market dislocation during the second quarter and repurchased shares at a significant discount to our net asset value with proceeds from the sale of assets, on an accretive basis. Our deep liquidity and strong balance sheet continue to give us the flexibility to execute multiple capital allocation opportunities simultaneously.”

The hotel is expected to generate a stabilized NOI return estimated between 8.0% and 8.5% and an accretive stabilized RevPAR, nearly double that of the company’s portfolio. The Company financed the acquisition with existing cash from its balance sheet.

The historic Gray & Dudley Hardware Company building was built around 1910 and was converted into a hotel in 2017. The company plans to continue to have the hotel operated by 21c in affiliation with Accor, providing guests with a hotel experience of lifestyle, combined with a multi-location museum of contemporary art. The eight-story structure offers more than 8,000 square feet (“SF”) of meeting and exhibit space, includes the Gray and Dudley restaurant and lounge, outdoor event space, fitness center, spa, and offsite valet parking. Rooms have wooden floors, high ceilings, large windows and luxurious contemporary furnishings.

Downtown Nashville – in the heart of demand

The hotel is in the heart of the city’s booming leisure and business demand drivers, just three blocks from Broadway, in the heart of Nashville’s entertainment district, and close to major Nashville employers. such as UBS, AT&T, AllianceBernstein and the Tennessee State Capitol. The property is expected to directly benefit from the new $1.2 billion Oracle campus development, which is expected to generate approximately 8,500 new jobs in Nashville. Across the river from the hotel is Nissan Stadium, home of the NFL’s Tennessee Titans and host to Nashville’s many concerts and special events. The property is also set to benefit from a significant redevelopment of Bankers Alley, further enhancing the area as a vibrant, walkable retail and restaurant corridor.

Nashville Market – one of the fastest growing metros

Nashville is one of the fastest growing metropolises in the country, benefiting from population gains and corporate relocations/expansions. The city has nearly 3.0 million square feet of Class A office space under construction, approximately 85% of which is concentrated in the CBD and Midtown urban center submarkets. A number of Fortune 500 companies such as Amazon, Oracle, Bridgestone Americas, iHeartMedia, Mitsubishi, and Nissan North America have a presence in Nashville. Major employers are drawn to Nashville because of its many high-quality educational institutions such as Vanderbilt University, Fisk University, and Tennessee State University.

Nashville’s rich music, sports and entertainment scene has also made the city one of the fastest growing tourist destinations in the United States, with 16.1 million visitors in 2019. Additionally, the city attracts major conventions and ranks 6th. destination in the country. Strong tourism and convention activity helped Nashville achieve a compound average RevPAR growth rate of 8.4% between 2009 and 2019. Supporting the region’s robust growth, Nashville International Airport, which has 21 carriers with more than 500 average daily departures to nearly 100 destinations, is undergoing a $1.2 billion expansion project slated for completion in 2023.

Following the hotel acquisition, the company owns 96 hotels located in 23 states.

Share buybacks

During the three months ended June 30, 2022, the Company repurchased approximately 4.2 million common shares at an average price of $11.93 per share, or $50.0 million, under its repurchase of shares of $250.0 million.

Property Overview

A brief overview of the acquisition with key information can be found in the following pages of this press release and can also be found on RLJ Lodging Trust’s website by following the link: https://investor.rljlodgingtrust. com/webcasts-presentations.

About Us

RLJ Lodging Trust is a self-managed, publicly traded real estate investment trust that primarily owns upscale, high-margin, focused-service and full-service compact branded hotels.

Forward-looking statements

This information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, measures taken in response to the COVID-19 pandemic and the impact of the COVID-19 pandemic on our business, and the assumptions on which these statements are based, which are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are generally identified by the use of the words “believe,” “plan,” “expect,” “anticipate,” “estimate,” “plan,” “may,” “will,” “will continue,” “ intention,” “should,” “may,” or similar expressions. Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, beliefs and expectations, these forward-looking statements are not predictions of “Future events or guarantees of future performance and the Company’s actual results could differ materially. from those set forth in the forward-looking statements. Factors that could cause such a difference include: current global economic uncertainty and worsening global economic conditions or low levels of economic growth; the duration and extent of the COVID-19 pandemic and its impact on travel demand and trust levels. that of consumers; measures taken by governments, businesses and individuals in response to the pandemic; the impact of the pandemic on global and regional economies, travel and economic activity; public adoption rates of COVID-19 vaccines, including boosters, and their effectiveness against emerging variants of COVID-19, such as the Delta and Omicron variants, and the pace of recovery when the COVID-19 pandemic s attenuates; increased direct and indirect competition, changes in government regulations or accounting rules; changes in local, national and global real estate conditions; declines in the lodging industry; seasonality of the accommodation industry; risks related to natural disasters, such as earthquakes and hurricanes; hostilities, including international military conflicts, future terrorist attacks or fear of hostilities that affect travel, public health and/or economic activity and epidemics and/or pandemics, including COVID-19; the Company’s ability to obtain lines of credit or permanent financing on satisfactory terms; changes in interest rates; access to capital through offerings of the Company’s common and preferred shares of beneficial interest, or debt; the Company’s ability to identify suitable acquisitions; the Company’s ability to complete identified acquisitions and integrate those businesses; and inaccuracies in the Company’s accounting estimates. In addition, investors are urged to interpret many of the risks identified in the section entitled “Risk Factors” of the Company’s Form 10-K for the year ended December 31, 2021 as heightened due to the numerous adverse impacts of the COVID-19 pandemic. Given these uncertainties, undue reliance should not be placed on such statements. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements and urges investors to carefully review the information provided by the Company regarding risks and uncertainties in the sections titled “Risk Factors”, ” “Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s annual report, as well as the risks, uncertainties and other factors discussed in other filings by the company with the Securities and Exchange Commission.

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