Dealmaker extraordinaire Robert L. Johnson is at it again. This time, his real estate investment company, RLJ Development L.L.C., signed an agreement to buy 100 hotels from White Lodging Services Corp. for $1.7 billion.
Under the terms of the agreement, the sale of the first 87 hotels will close in the second quarter of 2006. Sales of the other 13 properties, which are either under construction or newly completed, will close over the next 18 to 24 months. RLJ Development currently owns 29 hotels.
“These hotels have a value of $1.7 billion. So when you add that to the $1 billion in assets we have under management, it will be approximately $3 billion in asset value that we will have as a result of this transaction,” says Johnson.
The deal also changes the landscape for other African American hotel owners and developers, says Andy Ingraham, president of the National Association of Black Hotel Owners, Operators & Developers. Today there are fewer than 100 black-owned hotels in the U.S., Ingraham says. The RLJ transaction effectively doubles the total. “You’re going to see, as a result of this, more African American companies doing the same thing and more majority-owned companies now wanting to partner with [black hotel developers,]” he says.
White Lodging Services will continue to manage the hotels. Many of the properties, which include Marriott International Inc. and Hilton Hotels Corp. franchises, are located in growing markets in Colorado, Indiana, and Texas.