Ashford Completes Acquisition of Westin O'Hare
November 13 2006 - 8:00AM
Business Wire
Ashford Hospitality Trust, Inc. (NYSE: AHT): Acquisition
Highlights: ? TTM NOI cap rate of 6.7% and EBITDA yield of 8.0%
based upon $125 million purchase price ? Continues Ashford's
expansion into major markets with entry into Chicago ? Ashford's
direct hotel portfolio increases to 74 assets totaling 13,488 rooms
Ashford Hospitality Trust, Inc. announced it has completed the
previously-announced acquisition of the 525-room Westin O'Hare in
Rosemont, Illinois for $125 million in cash ($238,095 per key). The
seller was JER Partners of McLean, VA. In concert with its ongoing
capital recycling efforts, the Company took title to the hotel as
part of a 1031 like-kind exchange. On a trailing 12-month basis,
the purchase price represents a cap rate of 6.7% on net operating
income and a 12.5x EBITDA multiple, or an 8.0% EBITDA yield.
Trailing 12-month revenues for the hotel are $41.1 million. Ashford
funded the acquisition with proceeds from the 1031 exchanges and
its July 2006 follow-on offering. Ashford expects to close in
November a $101 million loan on the property with a 10-year term at
a fixed interest rate of 5.81%. The Westin O'Hare contains 525
rooms, 43,000 square feet of meeting space and three food and
beverage facilities. Ashford intends to invest an additional $6.1
million over the next 24 months to further enhance the guestrooms
and bathrooms with new improvements such as soft goods and flat
panel TV's. Located on 11.5 acres, the hotel has space for a
potential expansion. The Westin O'Hare is the only four-star,
four-diamond hotel in the O'Hare submarket and boasts the highest
meeting space per guestroom ratio in the market. The Westin O'Hare
is managed by Starwood Hotel & Resorts Worldwide under a
long-term management agreement. Monty Bennett, President and CEO of
Ashford Hospitality Trust, said, "This transaction is a great
example of our ability to source off-market transactions. Having
originally conducted due diligence on the property for a mezzanine
loan we were to originate, the owner opted to pursue a sale of the
hotel instead. We were able to move quickly and be the only buyer
in position to purchase the hotel. The strong competitive position
of this hotel in a growing market and with an exceptional brand
makes it a great addition to our portfolio. Its value should be
further enhanced with the renovation we have planned as well as
with the additional undeveloped land that can be used for a
potential expansion or sold as pad sites." 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 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 expectation that the renovation will be completed
in the next 24 months, 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. Ashford
Hospitality Trust, Inc. (NYSE: AHT): Acquisition Highlights: -- TTM
NOI cap rate of 6.7% and EBITDA yield of 8.0% based upon $125
million purchase price -- Continues Ashford's expansion into major
markets with entry into Chicago -- Ashford's direct hotel portfolio
increases to 74 assets totaling 13,488 rooms Ashford Hospitality
Trust, Inc. announced it has completed the previously-announced
acquisition of the 525-room Westin O'Hare in Rosemont, Illinois for
$125 million in cash ($238,095 per key). The seller was JER
Partners of McLean, VA. In concert with its ongoing capital
recycling efforts, the Company took title to the hotel as part of a
1031 like-kind exchange. On a trailing 12-month basis, the purchase
price represents a cap rate of 6.7% on net operating income and a
12.5x EBITDA multiple, or an 8.0% EBITDA yield. Trailing 12-month
revenues for the hotel are $41.1 million. Ashford funded the
acquisition with proceeds from the 1031 exchanges and its July 2006
follow-on offering. Ashford expects to close in November a $101
million loan on the property with a 10-year term at a fixed
interest rate of 5.81%. The Westin O'Hare contains 525 rooms,
43,000 square feet of meeting space and three food and beverage
facilities. Ashford intends to invest an additional $6.1 million
over the next 24 months to further enhance the guestrooms and
bathrooms with new improvements such as soft goods and flat panel
TV's. Located on 11.5 acres, the hotel has space for a potential
expansion. The Westin O'Hare is the only four-star, four-diamond
hotel in the O'Hare submarket and boasts the highest meeting space
per guestroom ratio in the market. The Westin O'Hare is managed by
Starwood Hotel & Resorts Worldwide under a long-term management
agreement. Monty Bennett, President and CEO of Ashford Hospitality
Trust, said, "This transaction is a great example of our ability to
source off-market transactions. Having originally conducted due
diligence on the property for a mezzanine loan we were to
originate, the owner opted to pursue a sale of the hotel instead.
We were able to move quickly and be the only buyer in position to
purchase the hotel. The strong competitive position of this hotel
in a growing market and with an exceptional brand makes it a great
addition to our portfolio. Its value should be further enhanced
with the renovation we have planned as well as with the additional
undeveloped land that can be used for a potential expansion or sold
as pad sites." 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
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
expectation that the renovation will be completed in the next 24
months, 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.
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