Ashford Acquires Pan Pacific Hotel in San Francisco
April 19 2006 - 5:48PM
PR Newswire (US)
Will Re-Brand Luxury Hotel to JW Marriott DALLAS, April 19
/PRNewswire-FirstCall/ -- Ashford Hospitality Trust, Inc.
(NYSE:AHT) announced it has completed the acquisition of the Pan
Pacific San Francisco Hotel in San Francisco, CA, for $95.0 million
in cash ($281,065 per key) from a partnership between Oxford
Lodging Advisory & Investment Group, LLC and Whitehall Street
Global Real Estate Limited Partnership 2001 and affiliates which
acquired the hotel in August 2003. The Company also announced it
has signed an agreement with Marriott International, Inc.
(NYSE:MAR) to re-brand the 338-room hotel as the JW Marriott Hotel
San Francisco. Marriott will manage the hotel under a long-term
incentive-based management agreement. Re-branding of the hotel to
JW Marriott and other renovation work, which will consist of
revenue enhancing upgrades to meeting space, rooms and food and
beverage facilities, will commence immediately. Ashford expects to
invest approximately $10 million in the re-branding and renovation
of the hotel, which is expected to be completed by December 2007.
The Company also intends to explore the value-added possibility of
converting the hotel's existing Executive Conference Center to a
high-end bar/restaurant, retail or downtown day spa concept later
in the year. On a forward twelve-month basis, the purchase price
equates to a 12.2x EBITDA multiple, an EBITDA yield of 8.2% and a
net operating income capitalization rate of 6.5% with projected
revenues of $32 million. The purchase price equates to a trailing
twelve-month net operating income capitalization rate of 3.9% and a
5.0% EBITDA yield. The property generated revenues of $25.5 million
for the calendar year 2005. Located at the corner of Post and Mason
Streets in the Union Square district, the Mobil four-star, AAA
four-diamond hotel is within walking distance to world famous San
Francisco destinations such as the Financial District, Chinatown,
theaters, upscale shopping, Embarcadero Center, Nob Hill, and the
Moscone Convention Center. Built in 1987 and renovated in 2004, the
property features 338 luxury rooms, 17,500 square feet of meeting
space, a state-of-the-art conference center and two food and
beverage facilities. The property is owned under a ground lease
which has a term expiring in 2083. Monty J. Bennett, President and
CEO of Ashford Hospitality Trust, said, "Throughout its storied
history, San Francisco has been known for fabulous luxury hotels
and destinations. Our agreement with Marriott to re-brand this
hotel as JW Marriott opens a new and exciting chapter in the city's
history as San Francisco joins an exclusive group of fourteen other
cities in the United States that can boast of a JW Marriott hotel.
With Marriott's proven reservation system and honored guest
program, as well as the luxury appeal of the JW Marriott brand
worldwide, we are confident this combination will help us tap into
the tremendous potential of this asset. The renovation and re-
branding to one of the world's preeminent luxury brands will
position us to outpace the dramatic turnaround we are expecting in
the San Francisco hotel market." The award-winning JW Marriott
Hotels & Resorts brand showcases dramatic, stylish interiors
that provide a distinctive sense of place. Design elements
throughout each property imbue the hotel with a sense of calm and
appropriateness to the setting. Service is unobtrusive and
anticipatory. All combine to help guests achieve their goals,
whether they are professional achievement or personal well-being.
Currently, there are 36 JW Marriott hotels in 18 countries. 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 expectation that the re- branding and renovation
will be completed by December 2007, 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 5% 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 Web
site: http://www.ahtreit.com/
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