{"id":1004096403,"date":"2014-05-13T05:18:50","date_gmt":"2014-05-13T13:18:50","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004096403"},"modified":"2022-12-05T19:25:30","modified_gmt":"2022-12-06T03:25:30","slug":"northstar-chatham-jv-to-buy-hotels-for-959m","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/northstar-chatham-jv-to-buy-hotels-for-959m\/","title":{"rendered":"NorthStar, Chatham JV to Buy Hotels for $959M"},"content":{"rendered":"

By Scott Baltic, Contributing Editor<\/em><\/p>\n

A joint venture of Chatham Lodging Trust and Cerberus Capital Management L.P. is selling, and a JV of Chatham and NorthStar Realty Finance Corp. is buying, the lion\u2019s share of a 6,848-room, 51-hotel portfolio in a transaction worth $1.3 billion, the parties announced last Friday.<\/p>\n

NorthStar is in essence acquiring Cerberus\u2019 89.7 percent stake in the JV, while Chatham is retaining its existing 10.3 percent share. The JV is taking 47 of the 51 hotels, for a net cash price of $933.9 million and a gross price of $958.5 million.<\/p>\n

The 47 properties are described as geographically diverse upscale extended-stay hotels and premium-branded select-service hotels located primarily in top metro markets, with the largest concentration of NOI from hotels in California. Thirty-nine are affiliated with Marriott or Hilton.<\/p>\n

The deal is expected to close by the end of this quarter. The portfolio will continue to be managed by Island Hospitality Management, Palm Beach, Fla.<\/p>\n

\u201cThe Cerberus\/Chatham joint venture has \u2026 proven to be a highly successful investment, turning our initial $37 million investment into distributions of approximately $114 million and profits of approximately $77 million \u2026 in less than three years,\u201d Chatham CFO Dennis Craven said in a release.<\/p>\n

NorthStar reportedly expects to earn an initial current yield of about 18 percent on its invested equity of $213 million.<\/p>\n

\u201cHaving spent a substantial portion of my career in and around the hotel industry, I believe that this investment, and the extended-stay and select service space generally, will provide strong risk-adjusted returns, particularly as the broader economy continues to gain momentum,\u201d David Hamamoto, NorthStar\u2019s chairman & CEO, said in a release.<\/p>\n

As part of the transaction, Chatham will acquire for a net cash price of $272.6 million (gross price of $341.5 million) four Residence Inn properties in Silicon Valley totaling 751 rooms. Chatham plans to renovate and expand all four, bumping the room count to 1,023 and spending about $59 million in the process.<\/p>\n

Neither Chatham nor NorthStar responded to Commercial Property Executive<\/i>\u2019s requests for additional information.<\/p>\n

The Cerberus\/Chatham JV purchased the portfolio, then consisting of 64 hotels, from Innkeepers USA Trust in late 2011<\/a>, after the seller emerged from Chapter 11.<\/p>\n

More recently, an investor group led by Cerberus Capital Management L.P., which owns the parent company of Albertsons and other major supermarket chains, agreed to buy Safeway Inc. for about $9.4 billion<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

A joint venture of Chatham Lodging Trust and Cerberus Capital Management is selling, and a JV of Chatham and NorthStar Realty Finance Corp. is buying, the lion\u2019s share of a 51-hotel portfolio in a transaction worth $1.3 billion.<\/p>\n","protected":false},"author":882,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21751,21783,21742],"tags":[],"class_list":["post-1004096403","post","type-post","status-publish","format-standard","hentry","category-hotel","category-investment","category-latest"],"acf":[],"yoast_head":"\nNorthStar, Chatham JV to Buy Hotels for $959M - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/northstar-chatham-jv-to-buy-hotels-for-959m\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"NorthStar, Chatham JV to Buy Hotels for $959M\" \/>\n<meta property=\"og:description\" content=\"A joint venture of Chatham Lodging Trust and Cerberus Capital Management is selling, and a JV of Chatham and NorthStar Realty Finance Corp. is buying, the lion\u2019s share of a 51-hotel portfolio in a transaction worth $1.3 billion.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/northstar-chatham-jv-to-buy-hotels-for-959m\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2014-05-13T13:18:50+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-06T03:25:30+00:00\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/northstar-chatham-jv-to-buy-hotels-for-959m\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/northstar-chatham-jv-to-buy-hotels-for-959m\\\/\"},\"author\":{\"name\":\"Scott Baltic\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/61ac1450f3ffaa0e850b834c28526555\"},\"headline\":\"NorthStar, Chatham JV to Buy Hotels for $959M\",\"datePublished\":\"2014-05-13T13:18:50+00:00\",\"dateModified\":\"2022-12-06T03:25:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/northstar-chatham-jv-to-buy-hotels-for-959m\\\/\"},\"wordCount\":389,\"commentCount\":0,\"articleSection\":[\"Hotel\",\"Investment\",\"News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/northstar-chatham-jv-to-buy-hotels-for-959m\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/northstar-chatham-jv-to-buy-hotels-for-959m\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/northstar-chatham-jv-to-buy-hotels-for-959m\\\/\",\"name\":\"NorthStar, Chatham JV to Buy Hotels for $959M - 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