NorthStar Realty Finance To Buy $1.1 Bln Hotel Portfolio - Quick Facts

(RTTNews) - NorthStar Realty Finance Corp. (NRF) has agreed to acquire a $1.1 billion hotel portfolio from Inland American Real Estate Trust. The Portfolio consists of 52 upscale extended stay and select service hotels with nearly 7,000 rooms. Including this portfolio and an additional around $700 million hotel portfolio that NorthStar Realty expects to close this month, NorthStar Realty would have an approximately $3.2 billion hotel portfolio, comprising 159 hotels and more than 20,000 rooms.

The company is buying the portfolio in a joint venture with Chatham Lodging Trust (CLDT), where NorthStar Realty would have around 90% ownership stake in the Portfolio and Chatham would hold nearly 10% minority interest. Island Hospitality is believed to manage a substantial majority of the hotels in the portfolio.

NorthStar Realty hopes to obtain non-recourse financing for around 70-75% of the purchase price, inclusive of costs, and earn an initial mid-teens cash-on-cash yield, based on estimated year-one NOI. The portfolio is principally affiliated with the Marriott (63%) and Hilton (32%) brands.