RLJ Lodging Trust Buying Midtown Hotel For $58M
RLJ Lodging Trust is under contract to buy one of Midtown Atlanta's newest hotel towers.
The Bethesda, Maryland-based hotel REIT has agreed to purchase the 186-room Hampton Inn & Suites Atlanta Midtown at 1231 West Peachtree St. for $58M, according to a press release. The hotel — located near the Savannah College of Art & Design in Atlanta and just north of Selig Enterprises' 1105 West Peachtree St., where Google is opening a large Atlanta office — was developed by North Point Hospitality Group and opened in February 2020.
“Midtown Atlanta is a top submarket, and this property is located within the heart of demand, surrounded by significant new development activity,” RLJ CEO Leslie Hale said in a statement. “The addition of this hotel complements our existing portfolio, and we are confident that it will be accretive to our RevPAR, margin and overall growth profile as the property ramps up.”
The publicly traded hotel investor is banking on Hampton Inn's Midtown location and the strength of the overall submarket, given its proximity to Georgia Tech, which is drawing a large chunk of new corporate offices inbound to Metro Atlanta.
RLJ isn't alone among hotel buyers focusing their attention on the Sun Belt, especially in Georgia, Florida and Texas, according to a midyear Marcus & Millichap research report. This comes as guests are taking a greater number of “postponed vacations” as vaccination rates increase, lifting average hotel occupancy across the nation from a low of 24.5% in April 2020 to more than 60% as of last month, according to Marcus & Millichap. It is unclear how the rapid spread of the delta variant will affect that travel rebound.
RLJ expects to close the transaction at some point this quarter.