|Dealmaker of the Day|
Hersha Hospitality Trust, Philadelphia, purchased the 245-room Courtyard San Diego Downtown from Wheelock Street Capital, Greenwich, Conn., for $71.1 million.
The real estate investment trust also signed a definitive agreement to purchase the 140-room Residence Inn Coconut Grove in Miami for $21.8 million. It will fund both acquisitions with cash on hand and borrowings from its credit facility.
“Both of these acquisitions further the company’s strategy to invest in high quality urban transient-focused hotels in our selected gateway markets,” said Jay Shah, CEO of Hersha Hospitality Trust. “The southern California and Miami markets exhibit strong growth prospects.”
Wheelock Street Capital completed a $6.4 million renovation of the Courtyard San Diego Downtown’s guest rooms and public areas in May. Hersha’s purchase price reflects a first full-year economic capitalization rate of 7.0 percent and an expected stabilized capitalization rate of 9 percent.
The Residence Inn Coconut Grove, the closest extended-stay property to the University of Miami in Coral Cables, will undergo a significant upgrade starting next May. The purchase price reflects a trailing capitalization rate of 7.2 percent. After the renovation Hersha expects the hotel to stabilize at a capitalization rate in excess of 11 percent.
The Miami market, one of the strongest lodging markets in the country, has seen revenue per available room growth of 13.6 percent through April.
Hersha anticipates closing on the Residence Inn Coconut Grove by the end of the second quarter.