Chatham Lodging Trust has acquired six Hilton-branded hotels with 589 rooms for $92 million, or approximately $156,000 per room. Two of the hotels are in Joplin, Mo.; two hotels in Effingham, Ill.; and two hotels in Paducah, Ky. Of the six hotels, there are two Homewood Suites, two Hampton Inn & Suites and two Home2 Suites by Hilton hotels.
Chatham funded the acquisition with available cash and borrowings on its revolving credit facility.
“This very strategic acquisition truly complements our existing portfolio for multiple reasons,” Chatham President & CEO Jeffrey H. Fisher said in a statement. “First, the hotels are generally the highest quality properties in their respective markets with the average age of the portfolio only 10 years. Second, 66 percent of the portfolio’s rooms are extended-stay, an exact match to our existing portfolio, more than double our nearest peer, and as everyone knows, is our preferred segment. Third, the hotels benefit from very favorable labor dynamics and generate hotel [earnings before interest, taxes, depreciation and amortization] margins that will further increase our already industry leading margins. Fourth, the portfolio diversifies our geographic footprint into areas of the country that are benefitting from expanded investments in manufacturing and distribution.”
Paducah is close to the many high traffic commerce routes between St. Louis; Louisville, Ky.; Nashville; and Memphis, Tenn. Effingham is midway between Indianapolis and St. Louis, and brings almost 200,000 of workers from eight neighboring counties into town each week. Joplin is adjacent to the intersection of both Interstates 44 and 49 in southwest Missouri and benefits from its location between Kansas City, Saint Louis, Oklahoma City and ever-growing northwest Arkansas, home to Walmart, J.B. Hunt and Tyson Foods.
”Lastly, this transaction highlights our extremely successful recycling initiative over the past 18 months, selling older, lower-[revenue per available room], lower-margin hotels at a low capitalization rate and reinvesting those proceeds into newer, higher-RevPAR higher-margin hotels at a higher capitalization rate that will be accretive to earnings and cash flow in 2026,” Fisher continued.
Over the past 18 months, Chatham sold six hotels for approximately $100 million. The hotels had an average age of 25 years, RevPAR of $101 and hotel EBITDA margins of 27 percent. In comparison, the $92 million acquired portfolio has an average age of 10 years, generated RevPAR of $116 and hotel EBITDA margins of 42 percent in 2025.
Although the acquired portfolio will only be included in Chatham’s results for 10 months in 2026, the below summarizes the financial contributions of the acquired portfolio to Chatham’s on a full-year basis:
- 2025 Hotel EBITDA of approximately $10 million would represent a 12 percent increase
- Using 2025 Hotel EBITDA and a pro forma blended interest rate of 6 percent, the acquired portfolio would add approximately $0.10 of adjusted FFO per year
- Chatham’s net debt to EBITDA ratio increases approximately 50 basis points
“We have multiple levers to enhance shareholder returns and are executing on those,” Fisher concluded. “We have been aggressively repurchasing shares and will continue to do so using free cash flow. We are increasing our common dividend by double digits for the second consecutive year. We have been patiently analyzing many acquisition opportunities, waiting for the right deal that ticked a lot of boxes, and this deal certainly does that. It represents our first acquisition in almost two years. We are enthusiastic about our future.”