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Chatham Lodging Buys Greater Charleston Hotel for $20.2M

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Chatham Lodging Trust (CLDT - Free Report) recently announced the acquisition of the Courtyard by Marriott Charleston Summerville, S.C. The 96-room hotel, located in Nexton, has been acquired for $20.2 million, or around $210,000 per room.

The company used cash from its recent share offering. Island Hospitality Management will manage the property. The construction of this hotel which opened in October 2014 has been made in adherence to strict building requirements. It is expected that the property will not require any additional capital for a minimum of four years.  

In addition to the acquisition of the Courtyard Charleston Summerville, the company is under contract to acquire the adjacent, under-construction, 96-room Residence Inn by Marriott, upon opening in second-quarter 2018.

The acquisitions seem a strategic fit for Chatham Lodging. This is because Nexton is an emerging mixed-use community near Charleston. It is anticipated to become a thriving place over the next decade with a projection of around 10,000 homes, eight million commercial square feet of area, and a medical campus.

Moreover, a lot of encouraging development is taking place around Nexton. Volvo is constructing a factory nearby Nexton, while major companies like Daimler and Boeing have their facilities in the area as well as have made land acquisitions for further expansions.

Per management, the two above-mentioned hotels are likely to experience solid top-line growth backed by corporate demand in future.

In fact, with corporate investment and expansion moves, as well as relocation of reputed companies over the recent years, South Carolina has emerged as one of the fastest growing states in the nation. Specifically, the greater Charleston area enjoys presence of companies belonging to aerospace, automotive, bioscience, marine and distribution industries. Also, there is significant presence of technology companies. This makes the corporate demand not only high but also well diversified in this region.

This Zacks Rank #3 (Hold) company has outperformed its industry in the past three months. Chatham Lodging’s shares have gained 14.6%, while the industry has recorded growth of 3.6% during this time frame.



 

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