Chesapeake Lodging Trust (CHSP) completed the acquisition of Hyatt Santa Barbara and 2 adjacent properties for $61.0 million. This real estate investment trust (:REIT) entered into a definitive agreement with the parent company Hyatt Hotels Corporation (H) before to acquire these assets.
The property is strategically positioned on the Pacific Ocean and is a stone’s throw away from the shops and restaurants in downtown Santa Barbara. The property consists of Hyatt Santa Barbara with 171 rooms, Parkside Inn comprising 24 rooms and a 5-villa apartment building.
Hyatt Santa Barbara comprises four Spanish colonial buildings with 3 stories each, which have been restored. Moreover, the property is situated across the Santa Barbara beach along the East Cabrillo Boulevard. The hotel consists of well-sized guestrooms, which include 5 suites spanning 700 square feet, a flexible meeting place spanning 10,000 square feet and a full-service restaurant and lounge. Additionally, it possesses a full-service spa, a heated outdoor pool and whirlpool, a business service centre and a spacious fitness centre.
Recently, Hyatt completed the renovation of the Santa Barbara property that cost the company roughly $12 million. Moreover, Chesapeake Lodging is expected to refurbish the bar and restaurant with an innovative design and service concept.
This acquisition is an important step for Chesapeake Lodging, owing to the strength of the Hyatt brand and the compelling growth opportunities that the Santa Barbara market provides. This strategic move is expected to be accretive to the company’s long-term earnings and supplement its portfolio of premium high-quality properties.
The company has been active on acquisitions of late. Recently, Chesapeake Lodging acquired Hyatt Place New York Midtown South for $76.2 million from Hyatt Hotels Corp. Moreover, in Sep 2012, it acquired the 429-room Hyatt Regency Mission Bay Spa and Marina hotel in San Diego, Calif. for $62.0 million.
Chesapeake Lodging owns luxury and upper-upscale hotels in some of the most desirable locations in the United States. The company specifically focuses on owning and acquiring hotels at prices below replacement cost, with attractive return on investments and significant upside potential. Currently, the company owns 20 hotels with an aggregate of 5,932 rooms in 8 states and the districts of Columbia.
Chesapeake Lodging currently carries a Zacks Rank #2 (Buy). Other stocks that are also worth a look with a Zacks Rank #1 (Strong Buy) include CommonWealth REIT (CWH) and Extra Space Storage Inc. (EXR).
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