Chesapeake Lodging Is Substantially Undervalued Despite A Superior Portfolio
Dane Bowler • 23 Comments
Dane Bowler • 23 Comments
Tue, Jul. 12, 5:36 PM
Tue, Jul. 12, 4:25 PM
- The company expects RevPAR to be up 2.2%, and adjusted EBITDA and AFFO per share to be near the midpoint of previous guidance.
- The weak RevPAR is thanks to a slowdown from business travel across the portfolio. "We see these headwinds continuing as we start H2."
- Full results are due on July 29.
Mon, Jun. 27, 3:20 PM
- There's plenty of green in the REIT space today, with the IYR off just 0.25% (vs. the S&P 500's 2% decline). Helping is the continuing plunge in interest rates, with the 10-year yield at 1.46% within seven basis points of an all-time low.
- Among the gainers are Realty Income (O +1.7%), National Retail Properties (NNN +1%), Senior Housing (SNH +2.2%), Omega Healthcare (OHI +0.9%), AvalonBay (AVB +1.1%), Kimco (KIM +1.3%), Tanger Factory (SKT +1.9%), and Public Storage (PSA +3.8%).
- Lodging REITs, however, are dependent on a steady stream of overseas tourist money, and the dollar's continued surge vs. everything not named the yen promises to crimp foreign visits. Ashford (AHT -6.6%), Sunstone (SHO -4.8%), LaSalle (LHO -4.1%), Pebblebrook (PEB -4.2%), Chesapeake (CHSP -3.3%), Host (HT -6.7%), DiamondRock (DRH -4.8%), Apple (APLE -2.9%), FelCor (FCH -5.4%).
Fri, Jun. 24, 12:25 AM
- Chesapeake Lodging Trust (NYSE:CHSP) closed $150M fixed-rate mortgage loan secured by 502-room Hyatt Regency Boston, provided by MetLife.
- Mortgage 10-year loan has a fixed interest rate of 4.25% p.a., principal and interest based on a 30-year amortization.
- Net proceeds to be used to repay outstanding borrowings under the revolving credit facility.
Wed, Jun. 15, 10:01 AM
- The San Francisco Board of Supervisors last week passed a bill requiring home-sharing services like Airbnb (Private:AIRB) to remove listings of units that have not been registered with the San Francisco Office of Short-Term Rentals.
- The team at Canaccord expects a near-term reduction of Airbnb listings of 80%, and nearly 50% on a stabilized basis. This should be a "marginal tailwind," and help San Francisco relative to other major hotel markets in coming months. Other cities are likely to follow suit.
- Buy rated stocks remain: Apple Hospitality (APLE +0.6%), DiamondRock (DRH +2%), Summit Hotel (INN +0.6%), Marriott (MAR +0.9%), and RLJ Lodging (RLJ +1.6%).
- Meanwhile, the lodging sector as a whole has its tail in the air as not only this news, but Airbnb's agreement to begin collecting occupancy tax in Pennsylvania filters through.
- Ashford (AHP +1.6%), (AHT +1.2%), Starwood (HOT +0.8%), Hospitality Properties (HPT +0.8%), Host Hotels (HST +1.5%), LaSalle (LHO +2.2%), Sunstone Hotel (SHO +1.1%), Pebblebrook (PEB +2.2%), Chesapeake (CHSP +1.3%), Chatham (CLDT +1.2%), Hersha (HT +1.4%)
Thu, Jun. 9, 11:52 AM
- The team hosted meetings with 29 companies over two days across six subsectors. Some highlights:
- Lodging: Business travel remains soft and most are operating defensively by grouping up and reducing leverage. NYC is flooded with hotels available for sale which should pressure pricing.
- Apartments: The slowdown in NoCal is concentrated in Soma and San Jose, but expected to be temporary. The NYC slowdown is expected to endure through 2017. Merchant builders in Houston with deliveries in 2017 are in trouble - an opportunity for Camden Property Trust (NYSE:CPT) to pick up assets on the cheap.
- Malls: Concerns over department stores are overblown. Simon Property (NYSE:SPG) expects spreads to top mid-teens in the next five years. Omni-channel retail strategy is growing increasingly important as the WSJ reports 80% of online sales touch brick and mortar in some way.
- CS's Ian Weissman is ranked #1,134 out of #3,990 analysts on TipRanks.com.
- Tickers of interest: HPT, SHO, LHO, PEB, CHSP, INN, RLJ, EQR, AVB, ESS, PPS, UDR, AIV, GGP, BRX, KIM, WRI, MAC
Thu, May 19, 12:43 PM
- The entire lodging sector is feeling the pain of some pessimism from Bank of America Merrill Lynch on slowing demand.
- The investment firm is convinced that operators are at risk of falling short of their RevPAR guidance.
- Other declines include Ashford Hospitality (AHT -5.3%), Chesapeake Lodging Trust (CHSP -4.2%), InterContinental Hotels Group (IHG -3%), La Quinta (LQ -2.6%), Choice Hotels (CHH -1.5%), Marriott International (MAR -1.5%), and Interval Leisure Group (IILG -5.1%).
- Previously: BAML: Benign lodging cycle is over (May 19)
- Previously: Bank of America goes to the sideline on Hilton Worldwide (May 19)
Thu, May 19, 9:58 AM
- RLJ Lodging Trust (RLJ -5.1%) is the recipient of a two-notch downgrade to Underperform from Buy at BAML.
- The sector as a whole is under a great deal of pressure again today, still reacting to the FOMC's surprising hawkishness yesterday. Not only do higher rates compete with these dividend payers, but operationally there's pain as the resultant stronger dollar slows foreign demand for rooms.
- Ashford Trust (AHT -3.6%), Sunstone Hotel (SHO -3.5%), LaSalle Hotel (LHO -3.7%), Chesapeake Lodging (CHSP -1.9%), Chatham Lodging (CLDT -1.8%), Host Hotels (HST -4.1%), Hersha Hospitality (HT -5.2%), DiamondRock (DRH -4.9%).
Tue, May 17, 4:23 PM
Thu, Apr. 28, 4:33 PM
Wed, Mar. 16, 4:40 PM
Mon, Mar. 14, 10:49 AM
- China's Anbang Insurance Group reportedly agreed to buy Strategic Hotels from Blackstone for $6.5B just a couple of months after the P-E giant purchased it for $6B, and a bidding war looks to be underway for Starwood Hotels.
- Zigging higher while the rest of the market zags lower are Hospitality Properties Trust (HPT +0.6%), Ashford Hospitality (AHP +1.7%), Ashford Prime (AHP +1.7%), LaSalle Hotel (LHO +1.4%), Pebblebrook Hotel (PEB +1.2%), Chesapeake Lodging (CHSP +1.1%), and Host Hotels (HST +2.2%).
Thu, Mar. 3, 9:39 AM
- RBC Capital and Wells Fargo each downgrade Chesapeake Lodging Trust (CHSP -2.6%) to Market Perform from Outperform. The moves come following more than a 30% Y/Y decline and an earnings miss two weeks ago.
- The company in late January was reported to have put itself up for sale, but there's been no word on any movement since.
Thu, Feb. 18, 4:38 PM
- Q4 adjusted FFO of $30.7M or $0.52 per share vs. $24M and $0.44 one year ago. Full-year AFFO per share of $2.21 vs. $1.97 in 2014.
- Q4 pro forma occupancy of 79% up 380 basis points Y/Y. Pro forma ADR of $222.41 down 1.2%. RevPAR of $175.68 up 3.8%. Adjusted hotel EBITDA margin of 32.7% up 240 basis points.
- Full-year 2016 AFFO outlook of $2.50-$2.60 per share vs. $2.21 in 2015. RevPAR increase of 5-7%.
- Conference call at 5 ET
- Previously: Chesapeake Lodging Trust misses by $0.02, misses on revenue (Feb. 18)
- CHSP flat after hours
Thu, Feb. 18, 4:19 PM
Thu, Jan. 28, 11:08 AM
- Details aren't known, but the WSJ's sources think a deal could value Chesapeake (CHSP +4.8%) at close to $2B vs. the current $1.4B market cap.
- The company owns 22 higher-end hotels with more than 6.5K rooms, and it would be the latest in a recent line of hotel companies going on the block or already sold.
- After a big run higher, the industry has struggled of late thanks to sluggish economic growth, new room supply, and a strong U.S. dollar crimping foreign visits and spending. CHSP is lower by nearly 40% over the past year.
- Previously: WSJ: Chesapeake Lodging Trust going on the block (Jan. 28)
Chesapeake Lodging Trust operates as a self advised real estate investment trust. It focuses on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service and extended-stay hotels in urban settings or unique locations... More
Industry: REIT - Hotel/Motel
Country: United States
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