BETHESDA, MD, October 16, 2013 -- LaSalle Hotel Properties (NYSE: LHO) today announced results for the quarter ended September 30, 2013. The Company's results include the following:
Third Quarter Highlights
Results excluding Park Central Hotel (see Park Central and WestHouse Update below)
* RevPAR excluding Park Central Hotel: Room revenue per available room ("RevPAR") for the quarter ended September 30, 2013 increased 5.1 percent to $186.48, as a result of a 2.5 percent increase in occupancy to 87.5 percent and a 2.6 percent increase in average daily rate ("ADR") to $213.07.
* Hotel EBITDA Margin excluding Park Central Hotel: The Company's hotel EBITDA margin for the third quarter was 36.0 percent, a 36 basis point improvement compared to the comparable prior year period.
Entire Portfolio Results
* RevPAR: RevPAR for the quarter ended September 30, 2013 increased 3.8 percent to $187.32, as a result of a 3.1 percent increase in ADR to $215.46 and a 0.7 percent increase in occupancy to 86.9 percent.
* Hotel EBITDA Margin: The Company's hotel EBITDA margin for the third quarter was 36.3 percent, a 52 basis point increase compared to the comparable prior year period.
* Adjusted EBITDA: The Company's adjusted EBITDA was $94.2 million, an increase of 15.3 percent over the third quarter of 2012. During the third quarter of 2013, the Company's financial results were impacted by $0.2 million of EBITDA displacement from the Park Central and WestHouse renovation project.
* Adjusted FFO: The Company generated third quarter adjusted FFO of $72.8 million, or $0.76 per diluted share/unit, compared to $58.4 million or $0.68 per diluted share/unit for the comparable prior year period.
* Acquisitions: The Company invested $303.8 million to acquire four assets:
− The Harbor Court Hotel and Hotel Triton, both located in San Francisco, CA for $47.8 million;
− The Serrano Hotel in San Francisco, CA for $71.5 million; and
− The Southernmost Hotel Collection in Key West, FL for $184.5 million.
* Capital Investments: The Company invested $28.6 million of capital in its hotels, most of which pertained to the continuation of the Park Central Hotel and WestHouse renovation in New York City.
* Dividends: On July 17, 2013, the Company declared a third quarter 2013 dividend of $0.28 per common share of beneficial interest, which was a 40 percent increase over the second quarter dividend.
"We are very pleased with our results and activities during the third quarter," said Michael D. Barnello, President and Chief Executive Officer of LaSalle Hotel Properties. "We acquired four outstanding assets in the markets of San Francisco and Key West, both of which benefit from significant supply constraints and very strong demand. Furthermore, our portfolio's RevPAR, adjusted EBITDA, and adjusted FFO exceeded the high end of our expectations. As a result of our acquisitions and our performance during the third quarter, we have increased our full year 2013 outlook."
Excluding the Park Central Hotel, for the nine months ended September 30, 2013, RevPAR increased 5.8 percent to $171.10, with occupancy growth of 3.6 percent to 82.2 percent and ADR improvement of 2.1 percent to $208.21. The Company's hotel EBITDA margin excluding the Park Central Hotel was 33.1 percent, an increase of 65 basis points compared to the comparable prior year period. The Company invested $84.7 million of capital in the entire portfolio including the Park Central Hotel and WestHouse during the nine months ended September 30, 2013.
Park Central and WestHouse Update
The Company has nearly completed its renovation of the Park Central Hotel in New York City. As previously disclosed, the project consists of the full renovation and splitting of the original 934-room Park Central Hotel into two distinct hotels: the newly renovated 761-room Park Central Hotel and the upgraded 172-room premium WestHouse Hotel. The Park Central Hotel portion of the renovation is complete, as its lobby, meeting space, restaurant and all 761 of the hotel rooms have been completely renovated.
The Company has also completed the renovation of the vast majority of the WestHouse guestrooms, with the lobby to be completed by the end of November. EBITDA displacement on the entire project was $0.2 million during the third quarter and $8.0 million to date.
The Company's expectation for full year EBITDA displacement related to the entire project is $9.0 to $10.0 million.
As of September 30, 2013, the Company had total outstanding debt of $1.5 billion, including $461.0 million outstanding on its senior unsecured credit facility. Total net debt to trailing 12 month Corporate EBITDA (as defined in the Company's senior unsecured credit facility) was 4.6 times as of September 30, 2013 and its fixed charge coverage ratio was 3.3 times. For the third quarter, the Company's weighted average interest rate was 3.8 percent. As of September 30, 2013, the Company had $15.5 million of cash and cash equivalents on its balance sheet and capacity of $311.7 million available on its credit facilities. During the third quarter, the Company did not sell any stock under its ATM program.
2013 Fourth Quarter Outlook
The Company expects fourth quarter RevPAR, excluding the Park Central Hotel, to increase 3.0 percent to 5.0 percent. The Company's expectations assume a quick resolution to the government shutdown. The Company expects its portfolio, including the Park Central Hotel, to generate adjusted EBITDA of $71.0 million to $75.0 million and adjusted FFO per share/unit of $0.52 to $0.56.
The Company is updating its 2013 outlook. The revised outlook excludes any future acquisitions or equity issuances for the remainder of 2013. The revised outlook also assumes a quick resolution to the government shutdown. The Company's revised financial expectations for 2013 are as follows:
LaSalle Hotel Properties is a leading multi-operator real estate investment trust. The Company owns 45 hotels and a mezzanine loan secured by two hotels in Santa Monica, CA. The properties are upscale, full-service hotels, totaling approximately 11,400 guest rooms in 14 markets in 10 states and the District of Columbia. The
Company focuses on owning, redeveloping and repositioning upscale, full-service hotels located in urban, resort and convention markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier lodging companies, including Westin Hotels and Resorts, Hilton Hotels Corporation, Outrigger Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, White Lodging Services Corporation, Commune Hotels and Resorts, Davidson Hotel Company, Denihan Hospitality Group, the Kimpton Hotel & Restaurant Group, LLC, Accor, Destination Hotels & Resorts, HEI Hotels & Resorts, JRK Hotel Group, Inc., Viceroy Hotel Group, Highgate Hotels and Access Hotels & Resorts.