View:

Download DOC

Download PDF

Download XLS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 3, 2013

CHATHAM LODGING TRUST

(Exact name of Registrant as specified in its charter)

(561) 802-4477

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Item 7.01. Regulation FD Disclosure

A copy of a slide presentation that Chatham Lodging Trust (“Chatham”) is using in meetings with various outsiders is attached to this Current Report on Form 8-K (“Current Report”) as Exhibit 99.1 and is incorporated by reference herein. Additionally, Chatham has posted the slide presentation in the investor relations/presentations section of its website at www.chathamlodgingtrust.com.

The information in this Current Report, including the exhibit attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in this Current Report, including the exhibit, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act, regardless of any incorporation by reference language in any such filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD.

ITEM 9.01. Financial Statements and Exhibits.

(d) Exhibits.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

3

Exhibit 99.1 COMPANY PRESENTATION COMPANY PRESENTATION APRIL 2013 APRIL 2013

JEFFREY FISHER, CEO JEFFREY FISHER, CEO COMPANY OVERVIEW & BUSINESS UPDATE COMPANY OVERVIEW & BUSINESS UPDATE

Chatham Management Team Chatham Management Team Founder, CEO and Chairman of Innkeepers USA Trust (1994 – 2007) Grew company from seven hotels at 1994 IPO to 74 hotels at sale in 2007 318% return (11.8% CAGR) versus 209% return for FTSE NAREIT Equity Lodging / Resorts Index Extensive lodging industry relationships Significant ownership (3.4%) and investment (over $10 million) in Chatham Lodging Trust Jeffrey Fisher (Chief Executive Officer and Chairman) Partner of Addison Capital Advisors, a venture capital firm based in Memphis, TN (2005 – 2006) Vice President and Chief Accounting Officer of RFS Hotel Investors (2000 – 2004) Dennis Craven (Chief Financial Officer and EVP) Senior Vice President of The Kor Group, a leading owner and operator of luxury hotels (2006 – 2009) Oversaw $500 million of investments in 18 hotels Peter Willis (Chief Investment Officer and EVP) 1 Chief Financial Officer and Executive Vice President of Innkeepers USA Trust (2006 – 2010) Vice President of Acquisitions and Development for Innkeepers USA Trust (2001 – 2006)

Key Investment Highlights Key Investment Highlights Superior Select Service Operating Model High Quality Hotel Portfolio in Attractive MSAs Significant Embedded Growth and Attractive Acquisition Opportunities Upside From Recently Completed Renovation / Upgrade Investments Innkeepers Acquisition in 2011 Generating Strong Returns Generating Strong Financial Results Leading Common Dividend Yield 2

Successfully Executing Business Plan Successfully Executing Business Plan Acquired 20 hotels for over $465 (1) million since IPO and a 10.3% interest in $1.1 billion Innkeepers joint venture with Cerberus Capital Management Premium brands (Residence Inn, Homewood Suites, Courtyard, Hampton) 58% of assets in major markets (New York, D.C., Boston, and Southern California) (1) Attractive valuations with upside potential (estimated high-single to low-double digit cap rates) Substantial pipeline of additional acquisition opportunities Operating performance of hotels and joint venture exceeding expectations Increased RevPAR 8.0% year-over-year for the year ended Dec. 31, 2012 RevPAR up approx. 7.6% year-over-year for the quarter ended Dec. 31, 2012 Significant upside potential from recently completed renovations across ~70% of the portfolio Accessed capital markets to maintain financial flexibility and fund growth initiatives Completed $53 million follow-on offering in January 2013 Upsized, reduced costs and extended revolving credit facility to $105 million (matures Nov. 2015) Delivering leading returns to shareholders One of top performing lodging REIT stocks in 2012 with 43% increase in share price (2) Announced 5% increase in common dividend to $0.84 per share in FY 2013 (4.8% yield) (3) Annual dividend has grown 20% since IPO in 2010 1. Pro forma for Houston, TX hotel acquisition on February 6, 2013. Based on percentage of total acquisition cost. 2. Based on year-end closing stock price of $15.38 on December 31, 2012. 3. Based on closing stock price of $17.56 as of March 27, 2013. 3

COMPANY STRATEGY & ACQUISITIONS COMPANY STRATEGY & ACQUISITIONS JEFFREY FISHER, CEO JEFFREY FISHER, CEO

Chatham Strategy Chatham Strategy Focused on premium branded select service hotels Strong brands in high barrier to entry markets delivers higher RevPAR and market share than other select service hotels Only four public lodging REITs focused on select service hotel sector Favorable select service operating margins Targeting acquisitions at high-single to low-double digit cap rates Meaningful floor on returns even if recovery is slower than expected Attractive cash-on-cash returns and cap rates vs. upper upscale full service hotels Significant upside potential from RevPAR growth, high margins and flow-through Projected lodging industry RevPAR growth of over 20.0% over the next four years (1) Target high growth markets within the 25 largest MSAs Leverage existing platform / corporate overhead through future acquisitions Limited incremental overhead from future acquisitions (favorable operating leverage) Maintain balanced leverage Continue to grow common dividend (current annualized dividend yield of ~4.8%) (2) 1. Green Street Advisors, 2013-2016E. 2. Based on closing stock price of March 27, 2013. 4

On December 27, 2012, Chatham acquired the 122-room Hampton Inn Portland Downtown Waterfront in Portland, Maine for $28 million Purchase price includes adjacent lot that can be developed or sold Accretive off-market acquisition Ideally located in Old Port district on the downtown Portland peninsula offering ready access to the waterfront, historical attractions, boutiques, many restaurants and bars Trip Advisor #1 rated hotel in the Portland market Portland was voted “Best Destination for U.S. Travel” by AARP and the “Foodiest Small Town in America” by Bon Appetit Magazine Ground floor includes separately-owned and operated Sebago Brewing Company The property is managed by Island Hospitality Management, which is 90% owned by Mr. Fisher 5 Hampton Inn, Portland Downtown Waterfront Acquisition Overview New Hotel Acquisition – Portland, Maine

On February 6, 2013, Chatham acquired the 197- room Courtyard by Marriott at the Houston Medical Center in Houston, TX for $34.75 million Accretive off-market acquisition Opened in February 2010, the hotel features Marriott's new lobby concept and three meeting rooms comprising approximately 2,000 square feet Adjacent to the world's largest medical complex, the Texas Medical Center, which hosts over 50 medical organizations and will continue its expansion with $7.1 billion of capital investment planned by 2014 Houston is the nation's fifth largest metropolitan area and home to 26 Fortune 500 companies. The city has seen the highest employment gains in the U. S. for the last six years Property is located within close proximity to Chatham’s Hampton Inn Medical Center hotel The property is managed by Island Hospitality Management, which is 90% owned by Mr. Fisher 6 Acquisition Overview Courtyard by Marriott Houston Medical Center New Hotel Acquisition – Houston, Texas

Innkeepers JV Investment Innkeepers JV Investment In October 2011, Chatham invested $37 million for a 10.3% interest in a JV with Cerberus that acquired 64 hotels from the bankruptcy estate of Innkeepers USA Trust Net purchase price ~$118,000 per key ~34% discount to Apollo’s 2007 investment in portfolio $21.2 million of invested capital returned to the Company as of Dec. 31, 2012 with net proceeds from incremental new mortgage financing, the sale of eight non-core hotels and distributions of cash flow generated from operations Represents 57% of the Company’s initial investment returned within 12 months Attractive return profile Upside from completed / prefunded capital expenditures with RevPAR performance exceeding original expectations Received over $4 million cash dividends from joint venture operations for the year ended Dec. 31, 2012 Allows Chatham to leverage corporate infrastructure / overhead of JV 7

HOTEL HOTEL PORTFOLIO PORTFOLIO DENNIS CRAVEN, CFO DENNIS CRAVEN, CFO

High Quality Hotel Portfolio in Attractive MSAs High Quality Hotel Portfolio in Attractive MSAs 8 Boston (3%): Homewood Suites Billerica Hartford (2%): Homewood Suites Farmington Minnesota (4%): Homewood Suites Bloomington Pennsylvania (5%): Courtyard Altoona Springhill Suites Washington Nashville (2%): Homewood Suites Brentwood Orlando (2%): Homewood Suites Maitland Houston (11%) (1) : : Courtyard Houston Medical Center Hampton Inn & Suites Houston Medical Center Dallas (2%): Homewood Suites Dallas San Diego (18%): Homewood Suites Carlsbad Residence Inn San Diego Los Angeles (9%): Residence Inn Anaheim San Antonio (7%): Homewood Suites San Antonio Note: MSA / State (% of Total Acquisition Cost) 1. Acquisition closed February 6, 2013. Washington D.C. (14%): DoubleTree Washington D.C. Residence Inn Tysons Corner New York (14%): Residence Inn Holtsville Residence Inn White Plains Residence Inn New Rochelle 58% of Chatham’s portfolio is located in New York, Washington DC, Boston and Southern California markets Portland, ME (6%) Hampton Inn, Portland Downtown Waterfront

Market Leading RevPAR Growth ___________________________ Source: Company filings and earnings announcements. Chatham is delivering strong RevPAR growth versus peers RevPAR increased approximately 8.0% year-over-year for the twelve months ended Dec. 31, 2012 9.7% 8.8% 8.1% 8.0% 6.4% 6.1% 5.8% 5.3% 5.1% 4.6% 6.9% 7.4% 5.6% $97 $103 $160 $134 $139 $99 $119 $181 $107 $147 $65 $175 $142 0% 2% 4% 6% 8% 10% 12% Summit Chesapeake Pebblebrook Chatham RLJ Strategic Host Hersha Ashford Sunstone DiamondRock FelCor LaSalle RevPAR Growth $0 $50 $100 $150 $200 $250 $300 $ RevPAR 9 RevPAR Growth (Twelve months ended Dec. 31, 2012)

Market Leading EBITDA Margins Market Leading EBITDA Margins Chatham is delivering market leading EBITDA margins Hotel EBITDA Margin (Twelve months ended Dec. 31, 2012) Source: Company filings and earnings announcements. Chatham’s premium branded select service hotels generate high RevPAR levels and have low operating costs 10 37.4% 35.9% 34.1% 33.9% 32.1% 32.1% 31.1% 28.9% 27.4% 27.2% 24.9% 24.0% 22.4% 0% 5% 10% 15% 20% 25% 30% 35% 40% Chatham Hersha Chesapeake RLJ LaSalle Ashford Summit Sunstone Pebblebrook DiamondRock FelCor Host Strategic

Market Leading Flow-Through Performance Hotel EBITDA Margin Improvement (Twelve months ended Dec. 31, 2012) Renovations helping deliver increased penetration and margin improvement Source: Company filings and earnings announcements. 263bps 249bps 230bps 165bps 160bps 140bps 130bps 120bps 113bps 110bps 87bps 78bps 50bps 0bps 50bps 100bps 150bps 200bps 250bps 300bps Pebblebrook Summit Chesapeake Ashford Chatham Host Strategic Hersha LaSalle Sunstone DiamondRock RLJ FelCor growth (bps) 11

Attractive Relative Valuation Attractive Relative Valuation Chatham trades at an attractive relative valuation versus lodging REIT peers Price to 2013E FFO Multiple Note: Based on closing stock prices as of March 27, 2013. Source: FactSet, SNL and Company Filings. FFO or “Funds from Operations” per FYE 2013 Consensus estimates. 12 22.1x 17.0x 15.7x 13.8x 13.8x 13.4x 13.0x 12.4x 11.9x 11.7x 11.0x 10.8x 7.4x 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x BEE PEB FCH CHSP HST SHO HT DRH INN LHO CLDT RLJ AHT P / FFO

Market Leading Common Dividend Yield Market Leading Common Dividend Yield Chatham delivers a market leading dividend yield of 4.8% On December 4 th , 2012, Chatham announced a 5% increase to its common dividend to $0.84 per share in calendar 2013 (4.8% yield) The Company converted from a quarterly to a monthly dividend payment beginning in January 2013 Represents the Company’s second dividend increase since IPO and a 20% total increase from its original annual dividend rate of $0.70 per share 13 4.8% 4.4% 4.2% 3.8% 3.7% 3.1% 0.0% 0.0% 0.0% 2.5% 4.1% 3.7% 2.3% 52% 52% 32% 42% 37% 46% 28% 54% 58% 39% 0% 1% 2% 3% 4% 5% 6% Chatham Summit Chesapeake Hersha Ashford DiamondRock RLJ LaSalle Pebblebrook Host Strategic FelCor Sunstone Dividend Yield 0% 20% 40% 60% 80% 100% 120% FFO Payout Ratio Cash Dividend Yield / Payout Ratio Note: Based on closing stock prices as of March 27, 2013. Source: FactSet, SNL and Company Filings. FFO or “Funds from Operations” per FYE 2013 Consensus estimates.

FINANCIAL UPDATE FINANCIAL UPDATE DENNIS CRAVEN, CFO DENNIS CRAVEN, CFO

– 2012 Financial Update 2012 Financial Update Comparable Hotel RevPAR – Increased 7.6 percent year-over-year to $102 in Q4 2012; RevPAR up 8.0 percent year-over-year to $107 for twelve months ended Dec. 31, 2012 Adjusted EBITDA – Increased 81.0 percent year-over-year to $40.9 million for twelve months ended Dec. 31, 2012 Comparable Hotel EBITDA Margins – Advanced 160 basis points year-over-year to 37.4 percent for the twelve months ended Dec. 31, 2012, among the highest in the industry Adjusted FFO – Increased adjusted FFO per diluted share 46 percent year-over-year to $1.30 for the twelve months ended Dec. 31, 2012 Joint Venture Portfolio – Continued to exceed internal budget expectations for RevPAR and EBITDA. Received total distributions of $21.2 million or 57.3 percent of Chatham’s initial investment in the joint venture since making the investment in 2011 Exercised accordion feature to extend facility capacity to $105 million in Jan. 2013 Refinanced Mortgage Debt – Refinanced approx. $80 million in mortgage loans on three assets in Q1 2013 with new 10-year mortgages at a fixed rate of approximately 4.6 percent Increased Common Dividend – Announced a 5 percent increase to common dividend to $0.84 per share in calendar 2013 (4.8 percent yield) (1) 1. Based on closing stock price of $17.56 as of March 27, 2013. 14 to $95 million (maturing Nov. 2015) and lowered costs by approx. 250 basis points Upsized and extended revolving credit facility Renewed Revolving Credit Facility in Nov. 2012

$5 $120 $16 $83 $84 $89 $0 $20 $40 $60 $80 $100 $120 $140 $160 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 ($ in millions) Mortgage Debt (5) JV Mortgage Debt Drawn Revolver Pro Forma Debt Maturities Summary Capitalization Summary Capitalization Sources: Company filings and announcements. 1. Pro forma for January 2013 follow-on offering (3.6 million shares). 2. Pro forma for $35 million acquisition of Courtyard by Marriott at the Houston Medical Center, $50 million net proceeds from equity offering, and $19.8 million mortgage repayment of the Doubletree Suites by Hilton Washington, DC. 3. Pro forma for $19.8 million mortgage repayment of the Doubletree Suites by Hilton Washington, DC. 4. Reflects the Company’s share of Joint Venture debt. 5. Not pro forma for $80 million refinancing in Q1 2013 of the Residence Inn by Marriott San Diego, CA, the Residence Inn by Marriott Tysons Corner, VA and the Homewood Suites by Hilton on the Riverwalk in San Antonio, TX. Pro Forma Capitalization 15 ($ in millions, except per share data) 12/31/2012 Pro (As Reported) Adj. Forma Share Price (as of 3/27/13) $17.56 $17.56 Diluted Shares & Units O/S (1) 14.0 3.6 17.6 Market Capitalization $246.1 $309.1 Revolving Credit Facility (1) (2) $79.5 $4.6 $84.1 Mortgage Debt (3) 159.7 (19.8) 139.9 JV Mortgage Debt (4) 82.9 82.9 Total Debt $322.2 $307.0 Less: Unrestricted Cash (2) (4.5) 0.0 (4.5) Net Debt $317.7 $302.5 Enterprise Value $563.7 $611.6

Chatham Returns vs. Peers (LTM) Chatham Returns vs. Peers (LTM) Chatham has been among  the best performing lodging stocks over the past year and is paying a market-leading dividend Source: FactSet. Full Service Index is a composite index of PEB, HST, LHO, SHO, DRH, and CHSP. LTD Service Index is a composite index of RLJ, HT, and INN. 16 Share Price Performance Total Returns 18% 4% 31% 24% 7% 40%

Safe Harbor Disclosure Safe Harbor Disclosure We make forward-looking statements in this presentation that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of its business, financial condition, liquidity, results of operations, cash flow and plans and objectives. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions, we intend to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: use of the proceeds of this offering; market trends in its industry, interest rates, real estate values, the debt financing markets or the general economy or the demand for commercial real estate loans; its business and investment strategy; its projected operating results; actions and initiatives of the U.S. government and changes to U.S. government policies and the execution and impact of these actions, initiatives and policies; the state of the U.S. economy generally or in specific geographic regions; economic trends and economic recoveries; its ability to obtain and maintain financing arrangements; changes in the value of its hotel portfolio; the degree to which its hedging strategies may or may not protect us from interest rate volatility; impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters; its ability to satisfy the REIT qualification requirements for U.S. federal income tax purposes; availability of qualified personnel; estimates relating to its ability to make distributions to its shareholders in the future; general volatility of the capital markets and the market price of its common shares; and degree and nature of its competition. The forward-looking statements are based on its beliefs, assumptions and expectations of its future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, its business, financial condition, liquidity and results of operations may vary materially from those expressed in its forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 17