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Condor Hospitality Trust, Inc. (CDOR) Utilizing Accelerated Strategy to Reinvest in Newer, Premium-Branded Hotels
Condor Hospitality Trust, Inc. (NASDAQ: CDOR), formerly Supertel Hospitality, Inc., is a real estate investment trust (REIT) specializing in the select-service segment of the lodging industry. The company currently owns 46 hotels across the country operated by some of the hotel industry’s most well-regarded brand families – including Hilton (NYSE:HLT), Choice Hotels International (NYSE:CHH) and Wyndham (NYSE:WYN). In recent months, Condor has utilized an accelerated strategy aimed at transitioning its asset portfolio away from economy properties in the direction of newer, premium-branded upper midscale and upscale extended-stay hotels located primarily in the nation’s top metropolitan areas.
“Condor has an active acquisition pipeline, and we anticipate continuing the accelerated pace of capital recycling which we project will further strengthen our balance sheet through debt reduction and increasing liquidity, thereby enhancing the strategy underway to significantly grow the company through acquiring a much higher quality portfolio with the objective of increasing shareholder value,” Bill Blackham, chief executive officer of Condor, stated in a news release.
In July, Condor gave prospective shareholders a preview of this updated strategy when it announced the sale of two hotels in Alexandria, Virginia. Through this $19 million transaction, the company was able to retire $8.3 million in debt while applying the net proceeds to future acquisition efforts. As of its latest update, Condor was marketing 15 hotels for sale, which were expected to generate approximately $12.4 million in net proceeds after associated debt repayments.
The company has also made considerable progress toward bolstering its portfolio in recent weeks. Last month, Condor announced the signing of an agreement to acquire three properties in San Antonio, Atlanta and Jacksonville that fall squarely into its updated business strategy. These hotels, which are currently branded under the Marriott (NYSE:MAR) and InterContinental Hotels (NYSE:IHG) brand families, provide a “window into the company’s portfolio of the future,” according to Blackham.
Despite its aggressive transition efforts, Condor has continued to post strong financial results in recent months. In the second quarter of 2015, the company recorded $16.4 million in revenue from continuing operations, realizing a mild year-over-year increase. These results were driven by Condor’s increased revenue per available room, which rose by 4.3 percent from the previous year. This consistent performance should aid in the company’s continued efforts to transform its current property portfolio in the months to come.
For prospective shareholders, the company’s recent progress toward transitioning its property portfolio makes it an intriguing investment opportunity moving forward. Look for Condor to make significant strides toward achieving increased shareholder value as it works to strategically position itself in some of the country’s most lucrative hospitality markets.
For more information, visit www.condorhospitality.com
