ARLINGTON, VA–It is only one week into March and the month is already proving to be a busy period for hotel trades. The latest deal is Sotherly Hotels' acquisition of the 318-room Hyatt Centric Arlington for $79.7 million. As a part of the transaction, Sotherly closed on a $57 million first and second mortgage with Fifth Third Bank to partially fund the acquisition. It also secured a new franchise agreement with Hyatt Hotels Corp.
This deal follows the trade of the Beacon Hotel at the start of the month to a venture between Rockpoint Fund V Acquisitions and Three Wall Capital.
It also follows the news this week that Union Investment is acquiring a Thompson-branded lifestyle hotel for $120 million. It is being developed in the Navy Yard by Gone Yard Hotel Owner LLC, a joint venture between Geolo Capital and JW Capital Partners. The transfer will take place when the 11-story hotel opens, which is scheduled for the beginning of 2020.
The Hyatt Centric Arlington is located on a ground lease with direct frontage along Wilson Blvd. The hotel also has a 5-story subterranean parking garage with 300 spaces next to the Rosslyn Metro Station. It underwent a $6.2 million renovation in 2016 as part of its conversion to Hyatt Centric, Hyatt's full-service lifestyle brand.
For year-end December 31, 2017 the hotel operated at 84% occupancy, with an average daily rate of $176.31 and RevPAR of $148.13. The acquisition price represents a cap rate of approximately 6.3%.
Hyatt Centric Arlington will continue to be managed by Highgate Hotels under a new agreement with terms similar to the company's other management agreements with Chesapeake Hospitality.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
