RLJ Lodging Trust Sells Seven Hotels Near Chicago Midway Airport for $110 Million

RLJ Lodging Trust (NYSE: RLJ) completed the sale of seven hotel properties near Chicago Midway Airport for $110.0 million in October 2026, the company announced Nov. 4 as part of its third-quarter 2026 earnings release. RLJ provided $20.0 million of seller financing as part of the transaction.

RLJ Lodging Trust Midway Portfolio Sale: Key Terms

The sale price represents a multiple of 13.8 times forecasted 2026 Hotel EBITDA, or 16.1 times when required capital expenditures are included. The $20.0 million seller loan equals roughly 18% of the gross sale price, meaning RLJ did not receive the full consideration in cash at closing and retains credit exposure to the buyer.

At the stated 13.8x multiple, the portfolio implies approximately $7.97 million of forecast 2026 Hotel EBITDA. Including required capital expenditures, the implied cash-flow basis falls to roughly $6.83 million, illustrating the role that near-term renovation needs play in the 16.1x figure.

RLJ's full-year comparable RevPAR and Hotel EBITDA outlook excludes the seven Chicago Midway assets because they were sold after the end of the third quarter.

Third-Quarter Results Accompany the Disposition

RLJ disclosed the sale in its report for the three and nine months ended Sept. 30, 2026. For the third quarter, the company reported:

• Comparable RevPAR of $153.36, up 9.7% from a year earlier, driven by a 6.4% increase in ADR to $203.35 and a 230 basis point increase in occupancy to 75.4%.
• Comparable Hotel Revenue of $354.5 million, up 9.1%.
• Comparable Hotel EBITDA of $93.9 million, up 17.5%, with a Hotel EBITDA margin of 26.5%, up 190 basis points.
• Adjusted EBITDA of $85.2 million, up 17.3%.
• Net income of $4.6 million, compared with a net loss of $3.8 million a year earlier.
• Adjusted FFO per diluted common share and unit of $0.34, up 25.9%.

Non-room revenues rose 6.5% in the quarter, which the company attributed to growth in corporate transient and group demand and to its return-on-investment initiatives.

"We delivered another strong quarter, with results that once again exceeded our expectations across all metrics," said Leslie D. Hale, President and Chief Executive Officer. "Operating fundamentals accelerated during the quarter, with business travel leading the way alongside sustained strength in leisure and group, which disproportionately benefited our urban markets."

Raised 2026 Outlook

RLJ raised its full-year 2026 guidance, citing its third-quarter performance and preliminary October results. The updated outlook calls for:

• Comparable RevPAR growth of 5.75% to 6.25%.
• Comparable Hotel EBITDA of $377 million to $383 million.
• Adjusted EBITDA of $352 million to $358 million.
• Adjusted FFO per diluted share of $1.47 to $1.51.

The company also projected net interest expense of $101.0 million to $103.0 million, cash corporate G&A of $34.5 million to $35.5 million, and renovation-related capital expenditures of $80.0 million to $90.0 million. Potential future acquisitions, dispositions, financings or share repurchases are not included in the outlook.

Balance Sheet and Dividends

As of Sept. 30, RLJ had more than $1.0 billion of total liquidity, consisting of approximately $448.3 million of unrestricted cash and $600.0 million available under its revolving credit facility. The company had $2.2 billion of debt outstanding.

RLJ's Board of Trustees declared a quarterly cash dividend of $0.15 per common share, paid Oct. 15, 2026 to shareholders of record as of Sept. 30, and a third-quarter dividend of $0.4875 per Series A Preferred Share, paid Oct. 30, 2026. The company's comparable statistics reflect a 91-hotel portfolio owned as of Sept. 30, 2026.

Industry Context: Strong Fundamentals, Moderating Growth Expected

The sale comes during a period of improving U.S. lodging fundamentals. PwC raised its 2026 U.S. RevPAR forecast to 5.0%, supported by projected ADR growth of 3.4% and occupancy growth of 1.5%, and cited third-quarter RevPAR growth of 7.1%. CBRE reported 5.4% year-over-year growth in convention-linked group RevPAR through April 2026 and expects hotel inventory to grow at about 0.7% annually over the next three years, with hotel construction having declined for 15 consecutive months.

HVS expects RevPAR growth to moderate in 2027 as stronger 2026 comparisons and major-event demand fade, and noted that higher interest rates could push hotel capitalization rates upward, though stronger operating performance may offset some valuation pressure. Against that backdrop, the 13.8x forward Hotel EBITDA multiple is a key valuation marker for the transaction, with the 16.1x multiple including capital expenditures offering a more conservative view of buyer economics.

RLJ said it believes its urban-centric portfolio is well positioned to capture current demand trends.

Sources

• RLJ Lodging Trust, "RLJ Lodging Trust Reports Third Quarter 2026 Results": https://investor.rljlodgingtrust.com/news-releases/news-release-details/rlj-lodging-trust-reports-third-quarter-2026-results