BETHESDA, MD–RLJ Lodging Trust has acquired the 78-room Residence Inn Atlanta Midtown Historic located in Atlanta.
In November 2009, RLJ Lodging Trust purchased a mortgage loan collateralized by the hotel for approximately $5.0 million, or approximately $64,000 per key. RLJ Lodging Trust initiated and successfully acquired the asset through a foreclosure sale after the borrower defaulted on the loan in early 2013. The successful bid, which was equal to the company’s basis in the mortgage loan, represents a significant discount to the hotel’s value.
The hotel will be closed later this year to undergo a comprehensive renovation that will include upgrades to the guestrooms and public spaces. When the hotel re-opens in the third quarter of 2014, it will continue to have the Residence Inn by Marriott flag.
RLJ Lodging Trust expects that the total investment, including capital expenditures, will represent a forward capitalization rate of approximately 12% based on the hotel’s 2015 net operating income.