AHT Ashford Hospitality Trust Inc

Ashford Hospitality Trust, Inc. (NYSE: AHT): Acquisition Highlights: Comprised of 24 full-service, upper-upscale hotels and 27 premium select-service hotels in 31 markets across 18 states, the District of Columbia and Canada Increases portfolio allocation in premium branded upper-upscale assets in major metropolitan and coastal markets with above average RevPAR growth potential Acquisition price implies a projected forward 12-month NOI cap rate of approximately 7.6% and an estimated forward EBITDA yield of 9.0% Price per key of approximately $215,000 for full service hotels and $125,000 for select service hotels High quality assets include: Marriott Seattle Waterfront, Capital Hilton, Hilton Costa Mesa, Hyatt Regency Montreal, Hilton Tucson El Conquistador, Marriott Legacy Center, Renaissance Tampa, and Hilton La Jolla Torrey Pines. Ashford Hospitality Trust, Inc. (NYSE: AHT) announced it has completed the acquisition of a 51-hotel, 13,640-room (net after joint venture adjustment) hotel portfolio from CNL Hotels and Resorts for approximately $2.4 billion in total consideration ($177,000 per key). Monty J. Bennett, President and CEO of Ashford Hospitality Trust, said, "This portfolio is an unparalleled investment opportunity and transformational event for Ashford. This accretive transaction concentrates our portfolio in major metropolitan and coastal markets with largely upper-upscale brands, while providing us with a larger platform to execute our portfolio management and internal growth strategies. "To ensure that we extract the maximum value from this transaction, for the last several months we focused on integration efforts, fine-tuning the financing, implementing value-added asset management strategies and deleveraging our balance sheet. The transition will be smooth with the added staff mainly in our accounting and asset management areas, and we anticipate being at the lower end of the $12-16 million range we had previously projected for our incremental G&A. Continuous negotiations on the financing resulted in even more flexible terms and lower costs. We made substantial progress on several value added strategies including JV buyouts and refinancing along with restructuring of management agreements to increase EBITDA. We are well on our way to accomplishing our deleveraging goals with planned asset sales totaling approximately $570 million in two phases and potential joint venture discussions." Transaction Pricing The estimated forward NOI cap rate is 7.6% and the EBITDA yield is 9.0% resulting in an 11.1x EBITDA multiple. On a trailing 12-month basis, the transaction�s NOI cap rate is 7.0% with an EBITDA yield of 8.4% equating to an 11.9x EBITDA multiple. Transaction Funding The transaction was funded with the following sources, all of which with the exception of assumed debt were provided by Wachovia Securities: $928.5 million of 10-year fixed CMBS at 5.95%; assumed debt from the existing joint ventures of approximately $436.9 million at an average interest rate of 6.08%; a $555.1 million pool of floating-rate CMBS at 165 basis points over LIBOR; $200 million of preferred equity at 250 basis points over LIBOR; a one-year (with 2 year extension), $325 million term loan at a rate of 150 basis points over LIBOR; and a three-year $200 million revolver that is priced between 155 to 195 basis point over LIBOR depending on the loan-to-value ratio. The blended all-in cost of capital on this financing is 6.49%. Portfolio The portfolio is comprised of full-service, upper-upscale hotels that account for approximately 65% of trailing EBITDA and premium select-service hotels totaling approximately 35% of trailing EBITDA. The 24 full-service, upper-upscale hotels contain 8,069 rooms with such hotels as the Marriott Seattle Waterfront, Marriott Legacy Center, Renaissance Tampa, Hyatt Regency Montreal, Hilton Tucson El Conquistador, Hilton La Jolla Torrey Pines, Hilton Costa Mesa, and Capital Hilton. The balance of the portfolio is comprised of 27 premium select-service hotels totaling 5,571 rooms. The well maintained hotels in the portfolio have an average age of 14.5 years. For 2006, the portfolio's RevPAR was $99.51, resulting in a portfolio wide RevPAR yield penetration of approximately 116%. The 2006 ADR of $138 exceeds Ashford�s existing portfolio by 14%. The portfolio generated Gross Revenues of $689 million in 2006. The transaction further concentrates Ashford�s overall portfolio EBITDA in higher growth markets and solidifies its position in the upper-upscale and upscale chain segments with 60% upper-upscale, 35% upscale, 4% midscale and 1% luxury pro forma for the acquisition. Ashford�s portfolio EBITDA by brand now includes the industry�s strongest performers with 50% in the Marriott brand family, 31% in Hilton, 8% in Hyatt and 6% in Starwood. Geographic diversification by EBITDA is also enhanced with 35% South Atlantic (of which 44% is in the Washington, D.C. area), 25% Pacific, 11% North Central, 10% South Central, 9% Mid-Atlantic, 7% Mountain, 2% New England and 1% Canada. All but five of the 51 hotels are managed by their respective brands under long-term contracts. On a combined basis, Ashford has a total of eight different property managers with the largest being Marriott at 45% of the overall portfolio EBITDA, Remington Hotels at 22%, Hilton at 18% and Hyatt at 8%. Seventeen hotels in the acquisition are owned in joint ventures with ownership interests ranging from 70% to 89%. Capital Expenditure Plan Ashford expects to invest approximately $55 million in owner funded valued added capital improvements above the normal reserves for these assets in the first year to improve the physical product of the hotels and further enhance RevPAR yield penetration. 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 deleveraging will occur and in the timeframe projected, 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 either 4% or 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. � Hotel Location State # of Rooms Year Built Manager Ownership % Owned Rooms � Luxury & Upper Upscale Full Service Hotels: � Capital Hilton Washington DC DC 544� 1943� Hilton 75% 408� � Hilton Birmingham Perimeter Park Birmingham AL 205� 1984� Hilton 100% 205� � Hilton Costa Mesa Costa Mesa CA 486� 1983� Hilton 70% 340� � Hilton Dallas - Lincoln Centre Dallas TX 500� 1976� Hilton 75% 375� � Hilton La Jolla Torrey Pines La Jolla CA 394� 1989� Hilton 75% 296� � Hilton Rye Town Rye Town NY 446� 1973� Hilton 75% 335� � Hilton Suites Auburn Hills AuburnHills MI 224� 1991� Hilton 70% 157� � Hilton Tucson El Conquistador Golf Resort Tucson AZ 428� 1982� Hilton 75% 321� � Miami Hilton Airport & Towers Miami FL 500� 1987� Hilton 70% 350� � JW Marriott New Orleans New Orleans LA 494� 1984� Marriott 100% 494� � Marriott Bridgewater Bridgewater NJ 347� 2002� Marriott 100% 347� � Marriott BWI Airport Baltimore MD 310� 1988� Marriott 100% 310� � Marriott Legacy Center Plano TX 404� 2001� Marriott 100% 404� � Marriott Seattle Waterfront Seattle WA 358� 2003� Marriott 100% 358� � Marriott Suites Market Center Dallas TX 266� 1998� Marriott 100% 266� � Hyatt Regency Coral Gables CoralGables FL 242� 1987� Hyatt 100% 242� � Hyatt Regency Dearborn Detroit MI 772� 1976� Hyatt 100% 772� � Hyatt Regency Montreal Montreal CAN 607� 1976� Hyatt 100% 607� � Renaissance Tampa Tampa FL 293� 2004� Marriott 100% 293� � Embassy Suites Crystal City - Reagan Airport Arlington VA 267� 1985� Hilton 75% 200� � Embassy Suites Orlando Airport Orlando FL 174� 1999� Hilton 75% 131� � Embassy Suites Portland � Downtown Portland OR 276� 1997� Hilton 70% 193� � Embassy Suites Santa Clara - Silicon Valley Santa Clara CA 257� 1985� Hilton 75% 193� � Doubletree Crystal City - Reagan Airport Arlington VA 631� 1973� Hilton 75% 473� � Sub-Total � � 9,425� � � � 8,069� � Distinctive & Premium Select Service Hotels: � Courtyard Basking Ridge Basking Ridge NJ 235� 2001� Marriott 100% 235� � Courtyard Edison Edison NJ 146� 2002� Interstate 100% 146� � Courtyard Hartford � Manchester Manchester CT 90� 1999� Interstate 85% 77� � Courtyard Legacy Park Plano TX 153� 1998� Marriott 100% 153� � Courtyard Newark Newark CA 181� 2002� Marriott 100% 181� � Courtyard Oakland Airport Oakland CA 156� 2001� Marriott 100% 156� � Courtyard Old Town Scottsdale Scottsdale AZ 180� 1999� Marriott 100% 180� � Courtyard Marriott Village LBV Orlando FL 312� 2000� Marriott 100% 312� � Courtyard Philadelphia Downtown Philadelphia PA 498� 1999� Marriott 89% 443� � Courtyard San Francisco Downtown San Francisco CA 405� 2001� Marriott 100% 405� � Courtyard Seattle Downtown Seattle WA 250� 1999� Marriott 100% 250� � Residence Inn Atlanta � Buckhead Atlanta GA 150� 1997� Interstate 100% 150� � Residence Inn Atlanta Perimeter West Atlanta GA 128� 1987� Marriott 100% 128� � Residence Inn Dallas Plano Plano TX 126� 1998� Marriott 100% 126� � Residence Inn Hartford � Manchester Manchester CT 96� 2000� Interstate 85% 82� � Residence Inn Kansas City KansasCity MO 96� 1987� Marriott 100% 96� � Residence Inn Las Vegas Las Vegas NV 256� 1998� Marriott 100% 256� � Residence Inn Newark Newark CA 168� 2002� Marriott 100% 168� � Residence Inn Phoenix Airport Phoenix AZ 200� 1999� Marriott 100% 200� � Residence Inn Torrance Torrance CA 247� 1984� Marriott 100% 247� � SpringHill Suites Manhattan Beach Manhattan Beach CA 164� 2001� Marriott 100% 164� � SpringHill Suites Marriott Village LBV Orlando FL 400� 2000� Marriott 100% 400� � SpringHill Suites Philadelphia Plymouth Meeting PA 199� 2001� Marriott 100% 199� � SpringHill Suites Richmond Glen Allen VA 136� 2001� Marriott 100% 136� � Hampton Inn Houston Galleria Houston TX 176� 1995� Interstate 85% 150� � Fairfield Inn Marriott Village LBV Orlando FL 388� 2000� Marriott 100% 388� � TownePlace Suites Manhattan Beach Manhattan Beach CA 144� 2001� Marriott 100% 144� � Sub-Total 5,680� 5,571� Total 15,105� 13,640�