RLJ Lodging Trust, a publicly traded real estate investment trust, has announced the acquisition of the fee simple interest in Hotel Teatro in Denver, US, for $35.5m.

Situated in the Denver central business district (CBD), the property has been redeveloped into an independent boutique lifestyle hotel by converting the Denver Tramway Company office building.

The 110-room property is expected to generate a stabilised yield exceeding 10%.  

Hotel Teatro may take advantage of the redevelopment of the 16th Street Mall and Larimer Square and its proximity to Ball Arena, Coors Field, and Union Station, further strengthening its appeal to visitors.

It is also expected to benefit from its proximity to the Denver Performing Arts Complex, the Colorado Convention Centre, and the University of Colorado Denver.

Hotel Teatro was named one of the best hotels in Denver and Colorado by US News & World Report.

It was also awarded USA Today’s Best Pet-Friendly Hotel in 2021 and received a Conde Nast Readers Choice Award in 2023.  

RLJ Lodging Trust president and chief executive officer Leslie Hale said: “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. 

“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.”

To manage Hotel Teatro, RLJ Lodging Trust has partnered with Denver-based Sage Hospitality Group, a hotel operator in the Denver market.

Sage also manages the Trust’s Moxy Denver Cherry Creek Hotel and The Pierside Santa Monica.