Chatham Lodging Trust Acquires Six Hilton-Branded Hotels for $92 Million

Chatham Lodging Trust has acquired six Hilton-branded hotels totaling 589 rooms for $92 million, or approximately $156,000 per room. The portfolio includes two hotels, each in Joplin, Missouri; Effingham, Illinois; and Paducah, Kentucky. The properties consist of two Homewood Suites, two Hampton Inn and Suites, and two Home2 Suites by Hilton. Chatham funded the acquisition with available cash and borrowings on its revolving credit facility.

The acquired hotels have an average age of 10 years, with 66 percent of the rooms classified as extended-stay. The properties generated a 2025 RevPAR of $116 and hotel EBITDA margins of 42 percent. Based on the 2025 hotel net operating income, the acquisition represents an approximate 10 percent capitalization rate.

The hotels are located along major interstate routes near regional commercial and industrial centers. Paducah is situated on Interstate 24 near routes connecting St. Louis, Louisville, Nashville, and Memphis. Effingham is at the intersection of Interstates 57 and 70, between Indianapolis and St. Louis. Joplin is adjacent to Interstates 44 and 49 in southwest Missouri.

Chatham stated that the acquisition diversifies its geographic footprint and aligns with its existing portfolio, as 66 percent of the rooms are extended-stay. The company also indicated that the hotels benefit from local labor dynamics and generate hotel EBITDA margins that will increase its overall margins.

Over the past 18 months, Chatham sold six hotels for approximately $100 million. The sold hotels had an average age of 25 years, RevPAR of $101, and hotel EBITDA margins of 27 percent. In comparison, the newly acquired portfolio has an average age of 10 years, RevPAR of $116, and hotel EBITDA margins of 42 percent in 2025.

On a full-year basis, the acquired portfolio is expected to generate approximately $10 million in hotel EBITDA, representing 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 funds from operations per year. Chatham’s net debt to EBITDA ratio is expected to increase by approximately 50 basis points as a result of the acquisition.