Our primary objective is to generate attractive returns for our shareholders through investing in hotel properties at prices that provide strong returns on invested capital, paying dividends and generating long-term value appreciation.
Chatham is focused primarily on investing in upscale extended-stay hotels and premium-branded, select-service hotels.
We focus on acquiring hotel properties in markets that have strong demand generators and where we expect demand growth will outpace new supply. We also seek to acquire properties that we believe are under managed or undercapitalized. We intend to engage in new hotel development on a limited basis in where we believe we can generate outsized
returns on a risk-adjusted basis.
Opportunistic hotel repositioning: We intend to employ value-added strategies, such as re-branding, renovating, or changing management when we believe such strategies will increase the operating results and values of the hotels we acquire. In
certain locations such as Silicon Valley, we may redevelop a portion of the existing hotel by demolishing rooms and building a new tower with significantly more rooms and providing all of the public space needs of today’s traveler.
Aggressive Asset Management
Although as a REIT we cannot operate our hotels, we will proactively manage our third-party hotel managers in seeking to maximize hotel operating performance.
Our asset management activities will seek to ensure that our third-party hotel managers effectively utilize franchise brands’ marketing programs, develop effective sales management policies and plans, operate properties efficiently, control costs, and develop operational initiatives for our hotels that increase guest satisfaction.
As part of our asset management activities, we will regularly review opportunities to reinvest in our hotels to maintain quality, increase long-term value and generate attractive returns on invested capital. In Mountain View, California, we took an excess parcel of land and added 32 rooms and in other locations, we have converted meeting rooms that were under-utilized into additional guest rooms. These are very accretive investments.
Our management team, led by our chief executive officer, Jeffrey H. Fisher, has extensive experience acquiring, developing, financing, repositioning, managing and selling hotels.
Prior to forming Chatham Lodging Trust, Mr. Fisher served as chairman, chief executive officer and president of Innkeepers USA Trust, or Innkeepers, a New York Stock Exchange-listed hotel real estate investment trust, or REIT, from its inception in 1994 through its sale in June 2007.
Mr. Fisher successfully grew Innkeepers from a portfolio of seven hotels at the time of its initial public offering, or IPO, in 1994 to 74 hotels at the time of its sale and delivered strong returns for Innkeepers’ shareholders. Five of the eight members of the board of trustees of Innkeepers at the time of its sale in June 2007 currently serve as trustees of our company.
Our goal is to maximize the performance of our hotels through great collaboration with our operators.
Being flexible in our selection of hotel management companies increases the universe of potential acquisition opportunities. Island Hospitality is one of the best hotel operators of select service and extended-stay hotels in the industry and given the many markets where Island operates hotels, we use their expertise to help us underwrite and diligence potential hotel acquisitions. Since our inception in
2010, our portfolio has generated the highest operating margins among all lodging REITs which is a testament to the asset quality and Island Hospitality’s operating expertise.
Island Hospitality manages all of our wholly-owned hotels, all forty-seven hotels in the Innkeepers joint venture and 34 of the 48 hotels in the Inland joint venture.
We expect that a significant portion of our portfolio will consist of hotels in the upscale extended-stay segment, including brands such as Residence Inn by Marriott®, Homewood Suites by Hilton®, and Hyatt House.
We also invest in premium-branded select-service hotels such as Courtyard by Marriott®, Hilton Garden Inn®, Hampton Inn® and Hampton Inn and Suites®.