Chatham Lodging to Rebrand its Washington, D.C. Hotel to Residence Inn, Enhances Capital Structure with Debt Refinancings

  Chatham Lodging to Rebrand its Washington, D.C. Hotel to Residence Inn,
  Enhances Capital Structure with Debt Refinancings

Business Wire

PALM BEACH, Fla. -- February 4, 2013

Chatham Lodging Trust (NYSE: CLDT), a hotel real estate investment trust
(REIT) focused on investing in upscale extended-stay hotels and
premium-branded select-service hotels, today announced that it will rebrand
its 105-room Washington, D.C. hotel to a Residence Inn by Marriott following
an upgrade/renovation. Chatham acquired the hotel in July 2011, as part of a
five-hotel portfolio acquisition.

Additionally, the company announced it repaid the approximate $19 million loan
balance outstanding on the Washington, D.C. hotel and refinanced three other
mortgage loans, extending the company’s debt maturity and enhancing earnings
through reduced interest costs. The company will provide guidance for 2013 to
reflect these transactions and the pending acquisition of a 197-room Courtyard
by Marriott, currently under contract, during its fourth quarter earnings call
on February 20, 2013.

Rebranding of Washington, D.C. Hotel

The company terminated the DoubleTree by Hilton franchise license on its
105-room Washington, D.C. hotel in Foggy Bottom, located at 801 New Hampshire
Ave. N.W., and will convert it to the Residence Inn brand, upon concluding
renovations scheduled for completion in May. In the interim, the hotel will
operate as the Washington Guest Suites.

“The hotel is in a fantastic location, and offers over-sized, one-bedroom
suites, as well as a rooftop pool. The hotel performed well as a DoubleTree by
Hilton, but we believe the Residence Inn brand and demand for extended-stay
hotels in downtown Washington will significantly enhance the operating returns
and value of the real estate,” said Jeffrey H. Fisher, Chatham’s chief
executive officer. “Residence Inn hotels command a premium RevPAR market share
index of 125, compared to an index of 108 for the DoubleTree by Hilton brand.
We see excellent opportunities for the rebranded hotel to gain incremental
market share, RevPAR and cash flow.”

Debt Refinancing

The company refinanced with Barclays Bank, plc approximately $80 million in
mortgage loans on the Residence Inn by Marriott hotels in San Diego, Calif.,
and Tysons Corner, Va., as well as the Homewood Suites by Hilton on the
Riverwalk in San Antonio, Texas. The three new 10-year loans, individually
collateralized by the hotels, carry a fixed-interest rate of approximately 4.6
percent, with principal and interest based on a 30-year amortization. The
previous loans on the three properties carried an average interest rate of
approximately 6 percent. Additionally, the company repaid the approximate $19
million loan balance outstanding on its Washington, D.C. hotel using
borrowings under the company’s revolving secured credit facility.

“When we assumed the loans in connection with the acquisition of a five-hotel
portfolio from Innkeepers some 18 months ago, we negotiated a key provision
that allows us to repay the loans anytime without prepayment penalty or
defeasance,” said Dennis Craven, Chatham’s chief financial officer. “That
flexibility allowed us to take advantage of favorable lending opportunities in
today’s market. With these financings at historically low rates, we reduced
the weighted average rate on our total fixed-rate debt by 80 basis points to
5.18 percent and extended the weighted average maturity on our fixed-rate debt
to late 2020 from 2017. We do not have any significant loan maturities coming
due until 2016.”

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised REIT that was organized to invest in
upscale extended-stay hotels and premium-branded, select-service hotels. The
company currently owns 19 hotels with an aggregate of 2,536 rooms/suites in 11
states and the District of Columbia and holds a minority investment in a joint
venture that owns 55 hotels with 7,282 rooms/suites. Additional information
about Chatham may be found at www.chathamlodgingtrust.com.

This press release may contain “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995 about Chatham Lodging
Trust, including those statements regarding acquisitions, capital
expenditures, future operating results and the timing and composition of
revenues, among others, and statements containing words such as “expects,”
“believes” or “will,” which indicate that those statements are
forward-looking. Except for historical information, the matters discussed in
this press release are forward-looking statements that are subject to certain
risks and uncertainties that could cause the actual results or performance to
differ materially from those discussed in such statements. Additional risks
are discussed in the company’s filings with the Securities and Exchange
Commission.

Contact:

Daly Gray Public Relations
Jerry Daly, 703-435-6293
jerry@dalygray.com
or
Chatham Lodging Trust
Dennis Craven, 561-227-1386
Chief Financial Officer
dcraven@cl-trust.com
 
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