Chatham Lodging Trust has acquired the beachside 111-room Hilton Garden Inn Destin Miramar Beach, FL in an off-market transaction for $31 million, or approximately $279,000 per room.

The West Palm Beach, FL–based Chatham funded the purchase using available cash and borrowings under its credit facility. The hotel will be managed by Island Hospitality Management, which is owned by Chatham CEO and president Jeffrey Fisher.

The 2020-opened hotel, which is within walking distance to the white Gulf of Mexico beach, is expected to generate an estimated stabilized NOI yield of 8.0% to 8.5%.

“This hotel will generate strong cash flow from the outset, represent our third youngest hotel and generate a 2022 RevPAR premium of approximately 50 percent over our current portfolio,” said Jeffrey Fisher. Additionally, the hotel diversifies further Chatham’s portfolio by adding a predominantly leisure hotel and also expands our presence in the Sunbelt, which we believe will continue to benefit from population growth.”