Hersha Hospitality Trust, owner of high quality hotels in urban gateway markets and coastal destinations, announced April 3 the purchase of the 150-room Annapolis Waterfront Hotel, an Autograph Collection Hotel, for $41.5 million.
“We are pleased to acquire the Annapolis Waterfront Hotel, expanding our Mid-Atlantic cluster, at an attractive economic capitalization rate of 8.7 percent and 10.4x EBITDA multiple. The location of the hotel in the pedestrian scale core of the city is irreplaceable. The hotel is situated on the harbor adjacent to the town square, the Annapolis Yacht Basin and the Annapolis Yacht Club, at the base of Main Street’s restaurant and bars. It is a short 3-block walk from the Main Gate of the United States Naval Academy, all local tourism attractions and demand generators. This unique waterfront location provides a competitive advantage that enables the hotel to achieve strong occupancies and premium rates in a high barrier-to-entry marketplace,” stated Jay H. Shah, CEO, Hersha.
Shah continued, “We have been active on the disposition front over the past two years, selling 19 mature, stabilized hotels at an average economic capitalization rate of 5.9 percent and 15.1x EBITDA multiple. This acquisition allows us to replace a significant portion of the EBITDA from our 2018 sales and refinancing efforts. In addition to synergies from our Washington, D.C. hotels, we expect to leverage the capabilities acquired at our 14 other independent and soft branded hotels to drive performance and profitability and enhance the value of the asset.”
The Annapolis Waterfront Hotel was converted to an Autograph Collection in 2015 and is in close proximity to a number of demand generators including the United States Naval Academy, St. John’s College, the Maryland State House, and the State Capitol complex. The property boasts 15,000 square feet of function space, half of which is allocated to the hotel’s outdoor terrace, along with a leased waterside restaurant and bar. In addition to the F&B lease, the asset also generates lease income through onsite parking, slip rental fees, and various antenna leases.
The company has posted a presentation of supplemental information regarding the purchase of the Annapolis Waterfront Hotel on its website at www.hersha.com in the Investor Relations section under “Presentations”.
Source: Hersha Hospitality Trust
Images courtesy: Annapolis Waterfront Hotel