PALM BEACH, FL-A joint venture between Chatham Lodging Trust and Cerberus Capital Management has won 64 hotels for $1.125 billion in a bankruptcy auction. Innkeepers USA Trust owned the properties. The JV partners will assume the debt through a reorganization plan.
"We are excited to acquire these premium-branded select-service hotels early in the recovery of the lodging industry,” says Jeff Fisher, CEO of Chatham. “With a new capital structure in place, a committed partner in Cerberus and strong franchisor affiliation, our joint venture is well positioned to create value for our shareholders and Cerberus."
Together with its affiliates, Cerberus has about $23 billion under management. Tim Price, managing director at Cerberus, is pleased to take over most of Innkeepers’ hotels.
"Our ability to work with Innkeepers founder and former CEO Jeff Fisher, now CEO at Chatham, is great news for the company and for its employees,” Price says. “No one knows Innkeepers better than Jeff, and we are excited about the company's future prospects with a new capital structure in place."
Marc Beilinson, Innkeepers’ chief restructuring officer, says the debtors worked tirelessly to foster and promote spirited bidding on the company’s assets. “The results achieved mark the successful conclusion of a robust marketing process that was commenced by the company in September 2011,” he says. “We look forward to closing these transactions and emerging from chapter 11.”
In a separate auction Chatham Lodging was the winning bid for five properties—the Residence Inn Mission Valley, Residence Inn Anaheim (Garden Grove), Doubletree Washington, DC, Residence Inn Tyson’s Corner, and Homewood Suites San Antonio—that serve as collateral for loan trusts serviced by LNR Partners LLC. The final purchase price is $195 million.
“These top-tier branded hotels are great hotels, in prime markets and in excellent physical condition having been recently renovated, providing a solid foundation for future growth,” Fisher says. “This is an incredible opportunity for us and gives us a strong presence in some of the best hotel markets in the country.”
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