Ashford Trust announces planned sale of 5-hotel portfolio
- Noble Investment Group
Ashford Hospitality Trust, a real estate investment trust (REIT) focused on investing opportunistically in the hospitality industry in upper upscale hotels, has recently announced that it has entered into a definitive agreement to sell a 5-hotel, 1,396-room portfolio of select-service hotels for US$142 million in cash (US$102,000 per key) to Noble Investment Group.
The portfolio is comprised of:
- The 146-room Courtyard Edison in Edison, NJ
- The 150-room Residence Inn Buckhead in Atlanta, GA
- The 312-room Courtyard Lake Buena Vista, in Orlando, FL
- The 388-room Fairfield Inn Lake Buena Vista in Orlando, FL
- The 400-room Springhill Suites Lake Buena Vista in Orlando, FL
The three Orlando properties are managed by Marriott and the other two properties are managed by Remington Lodging.
The purchase price, including projected capex to be invested by Noble, represents a trailing 12- month cap rate of 8.0% on net operating income. On a trailing 12-month basis, the portfolio achieved RevPAR of US$84, with occupancy of 79% and Average Daily Rate of US$106.
The portfolio has an existing debt balance of approximately US$98 million, and Ashford Hospitality Trust expects the net proceeds from the disposition to be approximately US$37 million after debt repayment and transaction costs.
Ashford Hospitality Trust intends to use the net proceeds from the sale for general corporate purposes including net debt reduction, stock buybacks, or the acquisition of full service hotels in line with the company’s refined investment strategy. The transaction is scheduled to close in the second quarter, subject to certain closing conditions.
Monty J. Bennett, Ashford Trust's Chairman and Chief Executive Officer, said:
“We are pleased to announce this sale as it provides a positive first step in our announced strategy of divesting of our non-core, select-service assets. We will continue to pursue the sale of these hotels with a focus on maximizing value for our shareholders.”