Apple Hospitality REIT, Inc. APLE has acquired the 157-room Aloft Hotel in downtown Portland for $51.2 million. The buyout of this hotel, located at 379 Commercial Street, further strengthens the company’s foothold in the vibrant Portland market.
The acquisition is a strategic fit as Portland hosts a variety of corporate, government, trade, health care and educational demand generators as well as enjoys huge appeal for leisure travel. In July 2021, the revenue per available room for the Portland Downtown/International Jetport, Maine sub-market improved by approximately 19% compared to July 2019, per the data provided by STR. This reflects that the sub-market is apt for the acquisition.
Aloft Hotel is situated at a convenient distance to the Maine Medical Center, the University of Southern Maine, manufacturing companies and numerous corporate offices. Hence, the acquired property is well positioned to witness a high demand.
Moreover, the hotel is placed amid Portland’s working waterfront, and offers easy access to a variety of restaurants, shops, art galleries, museums and entertainment venues. It provides its guests the opportunity to avail an array of outdoor activities with boat tours, ferry service, historic landmarks and walking trails nearby. Hence, this hotel is well placed to attract leisure travelers, with the resumption of travel and recovery in leisure demand.
Per management, “We remain focused on maximizing long-term value for our shareholders and are actively exploring additional acquisition opportunities, like this one, that enhance our portfolio, align with our core ownership strategy and are well positioned for outperformance.”
In July, Apple Hospitality inked three separate contracts for the purchase of four hotels for $227 million. Of these, the company has already completed three transactions. Earlier this month, it completed the acquisition of 130-room Hyatt Place in downtown Greenville for $30 million and in August, it completed the buyout of the 178-room AC Hotel by Marriott in Portland, ME, for $66.8 million. The acquisition of Embassy Suites by Hilton to be constructed in Madison is anticipated to occur no earlier than 2023.
With a portfolio of 215 hotels and more than 28,100 guest rooms geographically diversified throughout 35 states, the company is well poised to capture the rebounding demand. It is backed by the relaxation of regulations related to the pandemic as well as the acceleration in vaccine distribution.
Shares of this Zacks Rank #2 (Buy) company have appreciated 4% in the past month, outperforming the industry’s decline of 0.2%.
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Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs
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