SAN FRANCISCO—RLJ Lodging Trust has acquired the 150-room Vantaggio Suites Cosmo Hotel for a purchase price of $29.5 million, or approximately $197,000 per key in an off-market transaction. The company purchased this hotel with cash available on its balance sheet.
Located three blocks from Union Square, the hotel was constructed in 1930 and is listed on the National Register of Historic Places. Recently, the property primarily catered to short-term stay rentals. Upon acquisition, RLJ Lodging Trust plans to close the unoccupied hotel for an extensive $13-million multi-phase conversion.
The renovation will be completed by the end of 2014, and the hotel will reopen at that time as a 150-room Courtyard by Marriott, according to RLJ Lodging Trust. Additionally, RLJ Lodging Trust expects that the total investment, including capital expenditures, will represent a forward capitalization rate of approximately 7.8% based on the hotel’s projected 2015 net operating income.
“The acquisition of this hotel at such an attractive price exemplifies our investment strategy of sourcing off-market premium focused-service hotels in high-density, urban markets,” Thomas J. Baltimore, Jr., president and CEO of RLJ Lodging Trust, said in a statement. “We expect that our proven track record with complex brand conversions will yield strong returns for our shareholders.”