RLJ Lodging Trust (the “Company”) today announced that it has acquired the fee simple interest in the 110-room Hotel Teatro in Denver (the “Hotel”) for a purchase price of $35.5 million. The Hotel was redeveloped into an independent boutique lifestyle hotel following the transformational conversion of the historic Denver Tramway Company office building, built circa 1911. The hotel is expected to generate over a 10% stabilized yield.
“We are pleased to expand our footprint in Denver by acquiring this unique boutique lifestyle hotel located in a prime location within Denver, in an off-market deal,” commented Leslie D. Hale, President and Chief Executive Officer. “The acquisition of this high-quality hotel further increases our mix of lifestyle properties in urban locations that benefit from seven-day-a-week demand. The acquisition price represents a significant discount to recent trades and replacement cost, validating our team’s capabilities and our advantage as an all-cash buyer to source high-quality acquisitions in this environment.”
Situated within the Denver CBD, the Hotel benefits from its heart-of-demand location in close proximity to the Denver Performing Arts Complex, the Colorado Convention Center, which recently completed a $233 million expansion in December 2023, and the University of Colorado Denver. The Hotel’s central location allows it to benefit from seven-day-a-week demand from diverse segments such as corporate, small group and conventions, as well as leisure. The property is also expected to benefit from the redevelopment of the 16th Street Mall and Larimer Square, in addition to proximity to other demand drivers such as Ball Arena, Coors Field, and Union Station.
Denver’s status as a growing metro area is underscored by thriving industries such as technology, bioscience, and financial services. Denver has experienced significant population growth due to the market’s relative affordability and from corporate relocations. Denver was recognized as one of the top 10 meeting destinations in North America by Cvent in 2023. The city is a premier tourism destination serving as the gateway to the Rockies and a top destination for sporting events with five major professional sports teams, as well as several top collegiate sports teams. Denver International Airport, which is the third busiest airport in the U.S. and the fifth busiest airport in the world, is currently undergoing a $2.3 billion expansion, which will increase capacity by 30% to serve 100 million annual passengers by 2028.
The Hotel is routinely recognized as one of the best hotels in Denver and Colorado by US News and World Report, was USA Today’s Best Pet-Friendly Hotel in 2021, and received a Conde Nast Readers Choice Award in 2023. The onsite restaurant, The Nickel, has also received numerous accolades including Best Denver Brunch in the OpenTable Diner’s Choice Awards and Denver’s Best Hotel Restaurant by MSN Online.
The Company has engaged Denver-based Sage Hospitality Group to manage the independent Hotel Teatro. Sage is the largest hotel operator in the Denver market and also manages the Company’s Moxy Denver Cherry Creek Hotel as well as The Pierside Santa Monica.
