Ashford Completes Acquisition of Hyatt Dulles Airport for $72.5 Million
October 31 2005 - 8:30AM
PR Newswire (US)
Acquisition Highlights: - Acquired at a forward twelve-month cap
rate of 7.5%, EBITDA multiple of 11.2x, and EBITDA yield of 8.9%
DALLAS, Oct. 31 /PRNewswire-FirstCall/ -- Ashford Hospitality
Trust, Inc. (NYSE:AHT) announced it has completed the acquisition
of the 316-room Hyatt Dulles in Herndon, VA, for $72.5 million in
cash. The purchase price equates to an 11.2x forward twelve-month
EBITDA multiple, an EBITDA yield of 8.9% and a forward twelve-month
net operating income capitalization rate of 7.5%. The property
generated revenues of $18.1 million on a trailing twelve month
basis. The trailing twelve month unleveraged EBITDA yield is 7.3%
and the net operating income capitalization rate is 6.0%. To
finance the purchase, Ashford obtained a two-year, $45 million loan
from Merrill Lynch Mortgage Lending that bears interest at a rate
of 200 basis points over LIBOR. The loan is interest only with
three one-year extension options. Monty J. Bennett, President and
CEO of Ashford Hospitality Trust, said, "We are pleased with the
Hyatt Dulles acquisition which increases Ashford's position in the
upper upscale lodging segment. The hotel's strong brand and
location, along with the recent renovations, position the property
to increase penetration in what is already a double-digit RevPAR
growth market. In addition to this upside potential, room and
meeting space expansion possibilities will be explored following
the completion of Ashford's restaurant and public area renovation.
While we have financed most of our portfolio with low cost, long
term, fixed rate debt, we selected a floating rate structure to
afford us the opportunity to further analyze value added
alternatives with this hotel." Opened in 1989, the Hyatt Dulles has
316 rooms and 17,422 square feet of meeting space and two food and
beverage facilities. Located in close proximity to Washington
Dulles International Airport, the Hyatt Dulles is expected to
benefit from the ongoing $3.4 billion expansion of the airport as
well as the annex to the Smithsonian Air and Space Museum that is
adjacent to the airport and draws an estimated 3.5 million visitors
per year. The Hyatt Dulles recently completed a $5 million
renovation that included the refurbishment of all guestrooms. The
renovation entailed new carpet and wall covering, new and upgraded
soft goods, and the refurbishment of credenzas and work areas. In
addition, bathrooms received new tile, granite vanities and new
fixtures. Although following this renovation there will be no
additional Hyatt brand capital requirements, Ashford intends to
renovate the restaurants and public areas. Hyatt will continue to
manage the property under a long term management agreement. Ashford
Hospitality Trust is a self-administered real estate investment
trust focused on investing in the hospitality industry across all
segments and at all levels of the capital structure, including
direct hotel investments, first mortgages, mezzanine loans and
sale-leaseback transactions. Additional information can be found on
the Company's web site at http://www.ahtreit.com/. Certain
statements and assumptions in this press release contain or are
based upon "forward-looking" information and are being made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties. When we use the words "will
likely result," "may," "anticipate," "estimate," "should,"
"expect," "believe," "intend," or similar expressions, we intend to
identify forward-looking statements. Such forward-looking
statements include, but are not limited to, the forward EBITDA
multiple, the forward income capitalization rate, the forward
EBITDA yield, the impact of the transaction on our business and
future financial condition, our business and investment strategy,
our understanding of our competition and current market trends and
opportunities and projected capital expenditures. Such statements
are subject to numerous assumptions and uncertainties, many of
which are outside Ashford's control. These forward-looking
statements are subject to known and unknown risks and
uncertainties, which could cause actual results to differ
materially from those anticipated, including, without limitation:
general volatility of the capital markets and the market price of
our common stock; changes in our business or investment strategy;
availability, terms and deployment of capital; availability of
qualified personnel; changes in our industry and the market in
which we operate, interest rates or the general economy; and the
degree and nature of our competition. These and other risk factors
are more fully discussed in Ashford's filings with the Securities
and Exchange Commission. EBITDA is defined as net income before
interest, taxes, depreciation and amortization. EBITDA yield is
defined as trailing twelve month EBITDA divided by the purchase
price. A capitalization rate is determined by dividing the
property's annual net operating income by the purchase price. Net
operating income is the property's funds from operations minus a
capital expense reserve of 4% of gross revenues. Funds from
operations ("FFO"), as defined by the White Paper on FFO approved
by the Board of Governors of the National Association of Real
Estate Investment Trusts ("NAREIT") in April 2002, represents net
income (loss) computed in accordance with generally accepted
accounting principles ("GAAP"), excluding gains (or losses) from
sales or properties and extraordinary items as defined by GAAP,
plus depreciation and amortization of real estate assets, and net
of adjustments for the portion of these items related to
unconsolidated entities and joint ventures. The forward-looking
statements included in this press release are only made as of the
date of this press release. Investors should not place undue
reliance on these forward-looking statements. We are not obligated
to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or
circumstances, changes in expectations or otherwise. Contact:
Douglas Kessler Chief Operating Officer and Head of Acquisitions
(972) 490-9600 Tripp Sullivan Corporate Communications, Inc. (615)
254-3376 DATASOURCE: Ashford Hospitality Trust, Inc. CONTACT:
Douglas Kessler, Chief Operating Officer and Head of Acquisitions
of Ashford Hospitality Trust, Inc., +1-972-490-9600; or Tripp
Sullivan of Corporate Communications, Inc., +1-615-254-3376, for
Ashford Hospitality Trust, Inc. Web site: http://www.ahtreit.com/
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