RLJ Lodging Trust has acquired the fee simple interest in the 110-room Hotel Teatro in Denver $35.5 million from DiNapoli Capital Partners. The hotel was redeveloped into an independent boutique lifestyle hotel following the conversion of the historic Denver Tramway Company office building, built circa 1911. The hotel is expected to generate over a 10 percent stabilized yield.
“We are pleased to expand our footprint in Denver by acquiring this unique boutique lifestyle hotel located in a prime location within Denver, in an off-market deal,” CEO and President Leslie Hale said in a statement. “The acquisition of this high-quality hotel further increases our mix of lifestyle properties in urban locations that benefit from seven-day-a-week demand. The acquisition price represents a significant discount to recent trades and replacement cost, validating our team’s capabilities and our advantage as an all-cash buyer to source high-quality acquisitions in this environment.”
Situated within the Denver central business district, the hotel is close to the Denver Performing Arts Complex, the Colorado Convention Center—which recently completed a $233 million expansion in December 2023—and the University of Colorado Denver. The property is also expected to benefit from the redevelopment of the 16th Street Mall and Larimer Square, in addition to proximity to other demand drivers such as Ball Arena, Coors Field and Union Station.
RLJ has engaged Denver-based Sage Hospitality Group to manage the independent Hotel Teatro. Sage is the largest hotel operator in the Denver market and also manages the company’s Moxy Denver Cherry Creek Hotel as well as The Pierside Santa Monica.