Since its formation in 2018, Sandpiper Lodging Belief (SLT), a Richmond, Va.-based actual property funding belief, has been working towards establishing a nationwide footprint of extended-stay motels and constructing significant scale within the phase. As SLT’s President and CEO Carter Rise tells LODGING, “We intend to construct a ‘best-in-class’ platform of extended-stay property that can persistently present sturdy money flows and finally very stable capital appreciation.”
Beginning with its preliminary acquisition of 9 WoodSpring Suites properties in 2018, SLT has selectively pursued acquisitions and ground-up improvement to additional broaden and diversify its portfolio. At the moment, the REIT owns 28 extended-stay motels throughout 9 states. Within the final yr alone, it added 5 properties, together with new manufacturers and its first resort in Florida, which Rise calls a “strategically necessary market.” In January, SLT accomplished the acquisition of one other 5 motels—WoodSpring Suites situated in White Marsh, Md., Greenbelt, Md., Virginia Seaside, Va., and two in Baton Rouge, La.—from its associates Sandpiper Hospitality III, LLC and Sandpiper Hospitality IV, LLC. The latter transaction was financed partly via borrowing below its not too long ago expanded $200 million revolving credit score facility and the rollover of nearly all of investor fairness within the affiliated funds.
These acquisitions weren’t SLT’s solely positive factors in 2022; the REIT simply ended what Rise describes as a file yr. “Whereas our efficiency was positively impacted on account of our acquisitions, occupancy remained very sturdy at our properties and our development in room fee (ADR) was the most important contributor to our income development because it improved meaningfully versus the prior yr,” Rise explains. Despite the fact that labor challenges and rising rates of interest offset some income positive factors, SLT’s adjusted funds from operations (AFFO) reached an all-time excessive, he notes.
Wanting on the yr forward, Rise stays optimistic. “Whereas we’ve seen a slower begin to 2023 concerning our occupancy, we all know the extended-stay sector is a really resilient asset class. These extended-stay motels have outperformed their nightly keep friends over the past three recessionary durations, and may the economic system proceed to melt in 2023, we consider SLT could be very nicely positioned.”
Headwinds or not, Rise sees development on the horizon. Armed with a powerful steadiness sheet, SLT intends to capitalize on alternatives once they current themselves, almost certainly within the latter half of 2023. “We proceed to pay attention most of our focus in these geographies the place there are sturdy development dynamics, i.e., states situated within the Mid-Atlantic, the Southeast, and the Southwest,” he explains. “We stay very optimistic in regards to the long-term prospects for SLT, particularly throughout the economic system and midscale sectors.”