Ashford Hospitality Completes Sale of Seven Select Service Hotels for $57.5 Million
May 21 2007 - 4:30PM
Business Wire
Ashford Hospitality Trust, Inc. (NYSE: AHT): Highlights: ? First
phase of asset sales nears completion ? Sales price equates to
$82,500 per key and 8.5% trailing 12 month NOI cap rate Ashford
Hospitality Trust, Inc. (NYSE: AHT) today announced that it has
completed the sale of seven Towne Place Suites for $57.5 million.
The sale is expected to generate a net gain of $17.2 million during
the second quarter of 2007, which is expected to be deferred
through a section 1031 tax-free exchange. The pricing equates to
$82,500 per key and a 8.5% trailing 12-month NOI cap rate. The
Company has now sold $147.3 million of the estimated $170 million
of Phase 1 assets, resulting in a net gain of $34.0 million, or
$0.24 per diluted share. The 16 hotels and two office buildings in
Phase 1 were originally acquired within larger portfolio
transactions and were considered non-core. Two hotels are currently
under contract and expected to be sold around June 30, 2007, with
one hotel and one office building remaining to be sold. The seven
Towne Place Suites are located in: Tewksbury, Massachusetts; Ft.
Worth, Texas; Miami, Florida; Miami Lakes, Florida; Mt. Laurel, New
Jersey; Scarborough, Maine; and, Newark, California. Monty J.
Bennett, President and Chief Executive Officer of Ashford,
commented, "With a few more assets left to sell in the first phase
of our asset sales strategy, we are ahead of our initial projection
in terms of gross proceeds and net gain. Combined with our recent
equity raise, completing the Phase I asset sales process will
reduce our net debt to total enterprise value to approximately 58%.
Paring down our non-core assets has also further concentrated our
portfolio in upper-upscale hotels in strong, growing metropolitan
and coastal markets. We continue to evaluate potential capital
recycling opportunities and expect the benefits of this
repositioned portfolio to continue to be evident in our strong
operating performance. Our efforts remain focused on internal
growth and extracting the maximum value out of our operating
performance in our portfolio." 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
timing for closing, 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.
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