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1. Company Snapshot

1.a. Company Description

Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels.At September, 30, 2020, The company owns interests in 86 hotels totaling 12,040 rooms/suites, comprised of 40 properties it wholly owns with an aggregate of 6,092 rooms/suites in 15 states and the District of Columbia and a minority investment in the Innkeepers joint ventures that owns 46 hotels with an aggregate of 5,948 rooms/suites.

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1.b. Last Insights on CLDT

Chatham Lodging Trust's recent performance was negatively driven by tariff turbulence and its impact on the US economy. The company announced strong Q4 2024 results, beating estimates with FFO of $0.20 per share. However, the overall market volatility and concerns over a recession fueled by disappointing employment reports and shifting tariff policy weighed on investor sentiment. Additionally, the company's preferred stock with a near 8% yield, while attractive, may not be enough to offset the market's concerns.

1.c. Company Highlights

2. Hotel REIT's Q3 Earnings: A Closer Look at Performance and Outlook

The company's Q3 2025 hotel EBITDA was $28.8 million, with adjusted EBITDA of $26.2 million and adjusted FFO of $0.32 per share, in line with analysts' estimates. The GOP margin for the quarter was 43.6%, a decline of only 90 basis points from Q3 2024, despite a challenging RevPAR environment. This was attributed to continued strong expense control and moderating inflationary cost pressures, as noted by Jeremy Wegner. Revenue performance was mixed, with RevPAR growing 2% and 8% in the coastal Northeast and Greater New York markets, respectively, but declining 10.8% year-over-year overall.

Publication Date: Nov -21

📋 Highlights
  • Hotel Sales & Liquidity:: Sold 5 hotels (avg. 25 years old) at ~6% cap rate and under contract for a 6th at $17M, with proceeds to fund value-enhancing opportunities, alongside repurchasing 1% of shares at $6.85 avg. price.
  • Q3 2025 Financials:: Reported hotel EBITDA of $28.8M, adjusted EBITDA of $26.2M, and adjusted FFO of $0.32/share, with GOP margin at 43.6% (down 90 bps YoY) despite RevPAR -10.8% YoY.
  • Regional Performance:: Coastal Northeast & Greater New York saw RevPAR growth of 2% and 8%, driven by supply constraints and mixed demand (leisure/business/government), while Silicon Valley RevPAR fell 1.7% excluding Sunnyvale hotels.
  • Q4 & 2025 Outlook:: Forecasts RevPAR -3.5% to -2.5% in Q4 and -0.7% to -0.3% for FY2025, with adjusted EBITDA of $16.7M–$18.3M (Q4) and $89.2M–$90.8M (full year), and adjusted FFO of $0.14–$0.17/share (Q4) and $0.96–$0.99/share (full year).
  • Acquisition & Development Focus:: Targeting cap rates >8% for purchases, prioritizing disciplined capital allocation across share buybacks, hotel acquisitions, and the Home2 Portland project (2028 opening), with returns above portfolio average.

Operational Highlights

Operationally, the company demonstrated resilience, with occupancy at the 4 Silicon Valley hotels remaining a solid 75%. The coastal Northeastern portfolio continued to perform well, benefiting from long-term supply growth restrictions in those markets. Dennis Craven attributed the RevPAR shortfall in Q3 to the Sunnyvale hotels being down 9% and the government shutdown impact in Washington, D.C.

Outlook and Guidance

The company expects RevPAR of minus 3.5% to minus 2.5%, adjusted EBITDA of $16.7 million to $18.3 million, and adjusted FFO per share of $0.14 to $0.17 in Q4. For the full year, the company expects RevPAR growth of minus 0.7% to minus 0.3%, adjusted EBITDA of $89.2 million to $90.8 million, and adjusted FFO per share of $0.96 to $0.99. Analysts estimate next year's revenue growth at 0.3%.

Valuation and Capital Allocation

With a P/E Ratio of 60.72 and an EV/EBITDA of 8.96, the company's valuation appears to be pricing in a certain level of growth. The company's priorities for capital allocation are to repurchase shares, acquire hotels, and develop the Home2 Portland project. The company's focus on day-to-day and week-to-week management of headcount and productivity contributed to the strong margin performance in Q3.

Acquisition Market and Development

Jeff Fisher noted that the acquisition market is becoming more reasonable, with seller pricing expectations becoming more realistic. The company is exercising patience and discipline in its acquisition strategy. The Portland development is expected to earn returns well above the portfolio's average, with a 21- to 24-month construction timeline and an expected opening in early 2028.

3. NewsRoom

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Buried Treasure: Your Map To 13 Strong-Yielding Bargain REITs

Nov -17

Source: seekingalpha.com

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When The Stimulus Stops

Nov -09

Source: seekingalpha.com

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Chatham Lodging Trust (CLDT) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Chatham Lodging (CLDT) Q3 FFO Match Estimates

Nov -05

Source: zacks.com

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Chatham Lodging Announces Third Quarter 2025 Results

Nov -05

Source: businesswire.com

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Chatham Lodging Trust (NYSE:CLDT) and Crown Castle (NYSE:CCI) Head-To-Head Survey

Oct -30

Source: defenseworld.net

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Contrasting Chatham Lodging Trust (NYSE:CLDT) and National Health Investors (NYSE:NHI)

Oct -23

Source: defenseworld.net

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Chatham Lodging Trust Announces Third Quarter 2025 Earnings Call to be Held on Wednesday, November 5, 2025

Oct -09

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.48%)

6. Segments

Room

Expected Growth: 2.5%

Chatham Lodging Trust's 2.5% room growth is driven by increasing demand from business and leisure travelers, particularly in urban markets. Additionally, the trust's strategic acquisitions and renovations of existing hotels have improved RevPAR. Furthermore, the growing trend of experiential travel and the trust's focus on providing unique experiences to guests have also contributed to the growth.

Other

Expected Growth: 2.0%

Chatham Lodging Trust's 2.0% growth is driven by increasing demand for lodging, particularly in urban areas, and a strong pipeline of new hotel openings. Additionally, the company's focus on cost containment and efficient operations has led to improved profitability. Furthermore, the trust's diversified portfolio of hotels across various brands and markets has helped to mitigate risks and drive stable growth.

Food and Beverage

Expected Growth: 2.8%

Chatham Lodging Trust's Food and Beverage segment growth of 2.8% is driven by increasing demand for experiential travel, rising average daily rates, and strategic renovations to enhance the guest experience. Additionally, the company's focus on premium brands and loyalty programs contributes to higher revenue per available room, further boosting growth.

Cost Reimbursements from Related Parties

Expected Growth: 1.5%

Chatham Lodging Trust's 1.5% growth in Cost Reimbursements from Related Parties is driven by increasing hotel operating expenses, higher property taxes, and insurance premiums. Additionally, the trust's expanding portfolio of hotels and strategic partnerships contribute to the growth, as well as the company's ability to negotiate favorable management contracts with its hotel operators.

7. Detailed Products

Hotel Rooms

Chatham Lodging Trust owns and invests in premium-branded, select-service hotels, offering comfortable and convenient accommodations to travelers.

Meeting and Event Spaces

Chatham Lodging Trust's hotels offer flexible meeting and event spaces, equipped with modern amenities, catering to corporate events, weddings, and social gatherings.

Food and Beverage Services

Chatham Lodging Trust's hotels provide on-site dining options, including restaurants, bars, and room service, offering a range of cuisines and beverages.

Amenities and Services

Chatham Lodging Trust's hotels offer a range of amenities, including fitness centers, pools, and business centers, to enhance the guest experience.

8. Chatham Lodging Trust's Porter Forces

Forces Ranking

Threat Of Substitutes

Chatham Lodging Trust operates in the hospitality industry, which is characterized by a moderate level of substitutes. While there are alternative accommodations available, such as Airbnb and vacation rentals, hotels and resorts remain a popular choice for travelers.

Bargaining Power Of Customers

Chatham Lodging Trust's customers have limited bargaining power due to the fragmented nature of the hospitality industry. Individual customers have little influence over prices and services.

Bargaining Power Of Suppliers

Chatham Lodging Trust relies on various suppliers for goods and services, including food and beverage providers, linen suppliers, and maintenance contractors. While suppliers have some bargaining power, the company's scale and diversification mitigate this risk.

Threat Of New Entrants

The hospitality industry has significant barriers to entry, including high capital requirements, regulatory hurdles, and the need for specialized expertise. These barriers limit the threat of new entrants and provide some protection for Chatham Lodging Trust's market position.

Intensity Of Rivalry

The hospitality industry is highly competitive, with many established players vying for market share. Chatham Lodging Trust faces intense rivalry from other hotel and resort operators, which can lead to pricing pressure and reduced profitability.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.56%
Debt Cost 3.95%
Equity Weight 59.44%
Equity Cost 12.71%
WACC 9.16%
Leverage 68.23%

11. Quality Control: Chatham Lodging Trust passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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RLJ Lodging

A-Score: 6.1/10

Value: 8.3

Growth: 4.7

Quality: 6.1

Yield: 8.0

Momentum: 2.5

Volatility: 7.0

1-Year Total Return ->

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DiamondRock Hospitality

A-Score: 5.7/10

Value: 5.3

Growth: 5.0

Quality: 4.9

Yield: 7.0

Momentum: 3.5

Volatility: 8.3

1-Year Total Return ->

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Chatham Lodging

A-Score: 5.5/10

Value: 6.2

Growth: 5.3

Quality: 4.7

Yield: 6.0

Momentum: 2.5

Volatility: 8.0

1-Year Total Return ->

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Xenia Hotels & Resorts

A-Score: 5.1/10

Value: 5.5

Growth: 4.7

Quality: 3.5

Yield: 6.0

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

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Braemar Hotels & Resorts

A-Score: 5.1/10

Value: 9.1

Growth: 3.0

Quality: 3.7

Yield: 9.0

Momentum: 3.0

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
SVC

A-Score: 4.9/10

Value: 9.8

Growth: 3.2

Quality: 5.2

Yield: 6.0

Momentum: 1.5

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.51$

Current Price

6.51$

Potential

-0.00%

Expected Cash-Flows