ANNAPOLIS, Md.--(BUSINESS WIRE)--Chesapeake Lodging Trust (NYSE: CHSP) (the "Trust") announced today that it has entered into a definitive agreement to acquire the 185-room Hyatt Place New York Midtown South, located in New York, New York, for a purchase price of $76.5 million, or approximately $414,000 per key. The hotel is currently under development at 52-54 West 36th Street, between 5th Avenue and 6th Avenue. Closing on the proposed acquisition is expected to occur following completion of the hotel by the seller, anticipated in the third quarter of 2012, and satisfaction of customary closing conditions. In conjunction with the proposed acquisition, the Trust has agreed to provide the seller $6.5 million in bridge financing to facilitate the completion of the development of the hotel. The Trust intends to enter into a management agreement with Real Hospitality Group, the operator of the Trust’s other hotel in New York located in Midtown on 31st Street.
James L. Francis, Chesapeake’s President and Chief Executive Officer, stated, “We are very pleased to announce the definitive agreement to acquire our second hotel in the highly desired midtown area of Manhattan at a very compelling per key price. Similar to the Holiday Inn New York City Midtown – 31st Street, which we acquired in late December 2011 and opened on January 19th, we expect the Hyatt Place to ramp-up very quickly given the robust demand in Manhattan, the strength of the Hyatt brand, and our operator’s extensive experience managing hotels in New York City. Following this acquisition, approximately 8% of our portfolio’s hotel rooms will be based in Midtown Manhattan."
Upon completion, the 25-story Hyatt Place New York Midtown South will contain 185 attractively designed guestrooms with the most current Hyatt décor package, ideal for both business and leisure travelers to the dynamic midtown marketplace. Each room will contain a central HVAC system and upgraded stylish bathrooms with glass-enclosed showers and granite vanity tops. All rooms feature a 42” high definition flat panel television, the plush Hyatt Grand Bed, state-of-the-art media and work center, refrigerator, wardrobe and comfortable seating areas. The hotel room mix currently consists of 27 double-bedded rooms and 158 king-bedded rooms, including four king-bedded rooms on the top floor with access to adjacent private terraces.
The hotel lobby Gallery is a warm, stylish and contemporary area with distinctive architecture and furnishings that create a relaxing, casual atmosphere, perfect for recapping the day’s events. The Gallery features a check-in kiosk, intimate Bakery Café with fresh snacks or entrees, specialty coffee drinks and full wine and cocktail bar, a TV den featuring a variety of comfortable gathering spaces and an e-room with complimentary computer and internet access and printing.
Mr. Francis continued, “This acquisition furthers our strategic relationship with Hyatt Hotels through ownership of the first Hyatt Place property in Manhattan. This brand is the perfect fit for New York and the blended lifestyle of work and play.”
Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service and extended-stay hotels in urban settings or unique locations in the United States. The Trust owns 12 hotels with an aggregate of 3,516 rooms in six states and the District of Columbia. Additional information can be found on the Trust’s website at www.chesapeakelodgingtrust.com.
Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such forward-looking statements include, but are not limited to, the expectation that the acquisition described will be consummated and within the anticipated timetable and that the ramp-up of the hotel following the acquisition will occur quickly, as well as the current plans for the hotel’s configuration and the appointment of the guestrooms and lobby. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Chesapeake Lodging Trust's control. The Trust undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances, except as required by law.