2024-03-28 11:29:44 ET
Summary
- RLJ Lodging Trust owns 97 hotels, with a focus on urban hotels in the Sunbelt region.
- RevPAR grew 9.2% in 2023, with a further increase of 4% expected for 2024.
- Adjusted FFO per share increased 22.1% in 2023 but is expected to be marginally lower in 2024 on higher interest rates.
- Net debt accounts for 49% of RLJ's enterprise value, with elevated leverage both a risk and an opportunity.
- The market cap rate of about 5.6% post capex spending, coupled with a growing EBITDA, creates a high single-digit return opportunity.
Introduction
RLJ Lodging Trust ( RLJ ) outperformed the Vanguard Real Estate Index Fund ETF ( VNQ ) over the past year, with hotel REITs delivering some of the strongest topline growth in the REIT sector, driven by an operational recovery following the COVID-19 pandemic:
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RLJ Lodging Trust: Growing Topline And A Beneficiary Of Lower Rates