RLJ Lodging Trust (RLJ) to Acquire Hilton Cabana Miami Beach in $71.6M Deal

December 3, 2012 9:34 AM EST
RLJ Lodging Trust (NYSE: RLJ) today announced that it has entered into a purchase and sale agreement to acquire upon completion the 231-room Hilton Cabana Miami Beach (the “Hotel”) for a fixed purchase price of $71.6 million, or approximately $310,000 per key.

The property opened as a hotel in the early 1950’s and was closed and gutted in 2007 in anticipation of a condominium conversion. The conversion did not materialize and the property went into foreclosure. In 2011, the current owners purchased the property to develop a new hotel, which they expect to complete and open in the fourth quarter of 2013 as a Hilton.

Upon entering the agreement, the Company committed to a $7.2 million deposit that will be refunded if the Hotel is not completed. The Company is not assuming any construction risk, including the risk of construction overruns. The Company expects that construction will be completed in approximately 12 months, with an anticipated opening late in fourth quarter of 2013.

Along with customary closing requirements and conditions, the acquisition of this hotel is also subject to other various conditions, including the substantial completion of the Hotel by a third-party developer within the contractual scope of the agreement. As a result, there can be no assurance that the Company will complete this transaction.

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