Hotel REIT Innkeepers USA Trust (KPA) has agreed to buy the 155-room Sheraton Rockville in Maryland from Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) for $23.3 million. The deal, which equals roughly $150,000 per key, was negotiated directly with Starwood.
The Sheraton Rockville, located less than 6 miles north of Washington, D.C.’s Capital Beltway, is currently under construction. The 5-story property is expected to open in this fall. The acquisition will be funded with borrowings under KPA’s unsecured line of credit, and the hotel will fly the Sheraton flag under a long-term franchise agreement.
“The Sheraton Rockville is our first acquisition from Starwood, one of the world’s most respected hotel companies, and we look forward to building on that relationship in what we hope to be many strategic acquisitions or developments with the Starwood family of brands,” says Jeffrey Fisher, CEO and president at KPA. “As the only Starwood-branded hotel in the immediate market, the hotel will be well suited to meet the demands of the tenants of the more than 12 million square feet of office and research space within a three-mile radius of the hotel.”
The acquisition, which is expected to close in the fourth quarter, is subject to a number of customary contractual closing conditions.