Condor Hospitality Refocused on Newer Hotel Assets in Secondary Markets

Bill Blackham, president and CEO of Condor Hospitality Trust, Inc. (NYSE: CDOR), participated in a video interview at Nareit’s REITweek: 2018 Investor Conference in New York.

During the past 12 months, Condor has sold 55 legacy assets and today only two hotels remain from the portfolio that existed 36 months ago. Blackham said the REIT has generated about $170 million in sales proceeds from the dispositions. Those funds have been redeployed to buy newer, premium-branded upper midscale and upscale hotels in secondary markets.

The new strategy has enabled Condor to outperform the industry in terms of revenue per available room (RevPAR) growth, as well as enabling margin expansion, according to Blackham.

“It would appear that the investment strategy is appropriate and working very nicely at this point in the cycle,” Blackham said.

Condor achieved 3.9 percent RevPAR growth in the first quarter compared with an industry average in the low threes and an even lower level for the company’s peer group, according to Blackham. He highlighted the strong fundamentals that exist in Condor’s secondary markets, adding that its portfolio of newer hotels is more in line with consumer demand and can generate premium pricing.

Blackham also noted that with a market capitalization of about $125 million, having access to appropriately priced capital presents a challenge. Other challenges ahead include sourcing acquisitions, as well as the price and availability of labor.