Chatham Lodging Trust Acquires Six New Hotels, Raising Dividend for the Second Consecutive Year

Chatham Lodging Trust expanded its business operations by purchasing six Hilton properties for USD 92 million, which serves as its first step towards future growth. The acquisition, which includes a mix of extended-stay hotels, also comes with a boost in dividend by 11 percent, highlighting the company’s confidence in its future prospects. The hotels, which Chatham operates throughout the United States, provide high-quality facilities which match the company’s dedication to premium hospitality assets.

Chatham Lodging Trust’s Strategic Hotel Acquisition

The portfolio of newly acquired properties comprises 589 rooms spread across six Hilton-branded hotels, which include Homewood Suites, Hampton Inn & Suites, and Home2 Suites by Hilton. The deal, worth approximately USD 156,000 per room, strengthens Chatham’s holdings in the extended-stay hotel segment, which is a cornerstone of its investment strategy. Chatham funded this acquisition through available cash and borrowings under its revolving credit facility, positioning the company for future growth in a competitive hospitality market.

These properties are located in Joplin, Missouri, Effingham, Illinois, and Paducah, Kentucky, areas that are vital to commerce due to their strategic positions along key interstate routes. The acquisitions are designed to tap into the growing demand for high-quality extended-stay accommodations, a trend that has been particularly strong among corporate travellers and long-term visitors.

Enhanced Dividend Signals Confidence in Future Growth

As part of its commitment to shareholder value, Chatham Lodging Trust has raised its quarterly common dividend by 11 percent to USD 0.10 per share for the first quarter of 2026. This marks the second consecutive year of double-digit dividend increases, reflecting the company’s strong cash flow and operational success. The preferred share dividend has also been set at USD 0.41406 per share, with both dividends scheduled for payout on April 15, 2026.

The company’s leadership has expressed confidence that the acquisitions will generate substantial returns, particularly given the high-quality assets involved in the deal. With the portfolio’s average age of only 10 years and strong EBITDA margins, Chatham expects these hotels to contribute positively to its free cash flow and adjusted funds from operations (FFO). This strategic acquisition positions Chatham for sustained long-term growth in the competitive hospitality market.

Targeting Extended-Stay Market with High-Quality Properties

One of the key factors that make this acquisition significant is the portfolio’s focus on extended-stay accommodations. Extended-stay hotels are a highly sought-after asset class due to their steady demand and resilience during economic downturns. The six Hilton-branded hotels are well-positioned to capture this demand, with 66 percent of the rooms in the newly acquired properties dedicated to the extended-stay segment.

Chatham’s portfolio already includes a large number of extended-stay hotels, making these new acquisitions a natural fit for the company. With hotel EBITDA margins reaching 42 percent in 2025 for these properties, the acquisition promises to enhance Chatham’s profitability and drive higher returns for its investors.

Strategic Repositioning of Chatham’s Portfolio

Chatham Lodging Trust has been actively repositioning its portfolio to focus on higher-margin, higher RevPAR hotels. This strategy is in line with its goal of optimising asset quality by divesting older, lower-performing properties and reinvesting in newer, more profitable ones. Over the past 18 months, Chatham sold six hotels for around USD 100 million, using the proceeds to acquire these newer Hilton-branded properties.

The company’s ability to diversify its geographic footprint is another advantage of this acquisition. With properties in Missouri, Illinois, and Kentucky, Chatham now has an even stronger presence in key U.S. regions, benefiting from increasing investments in manufacturing and distribution. These markets are poised for growth, making them attractive for long-term hospitality investments.

Chatham Lodging Trust’s Strategic Growth Continues in 2026

Chatham Lodging Trust achieved a crucial milestone when it acquired six Hilton-branded hotels for USD 92 million, which will serve as a foundation for its planned expansion of high-performing extended-stay hotels. The company demonstrates its commitment to shareholder value through its dividend increase while showing growth potential from its newly acquired assets. Chatham will achieve permanent success through its portfolio repositioning which will enhance both RevPAR and EBITDA margins, thus establishing the company as a top competitor in the U.S. hospitality industry.

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