ARA US Hospitality Trust divests Hyatt Place Pittsburgh Airport for US$7.7m

The REIT expects to complete the divestment in 1Q24.

ARA US Hospitality Trust (ARA H-Trust) has sold Hyatt Place Pittsburgh Airport to Bacall Companies for US$7.7m ($10.1m).

In a bourse filing, ARA H-Trust said it expects to complete the divestment of its 127-room hotel in 1Q24.

The hotel is the smallest property within the ARA H-Trust’s portfolio, accounting for 1.0% of the REIT’s total valuation as of 31 December 2022.

The REIT added that the hotel’s market room demand was negative at a compounded annual growth rate of -7.3% from 2019 to 2022. The hotel’s RevPAR Index (RPI) continues to struggle at 80% in 2023.

“Coupled with revenue underperformance, the Hotel is one of the bottom three performers, with a Gross Operating Profit margin of 21.6% in September 2023 trailing twelve months vs the Hyatt Portfolio average of 33.0%,” the REIT added.

The REIT will redeploy the freed-up capital from the sale of the hotel to either acquire accretive, higher yield properties, to generate stable and growing distributions to stapled security holders, or pare down existing bank borrowings to improve its portfolio’s average leverage ratio and increase debt headroom.

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