DALLAS, Oct. 9, 2018 /PRNewswire/ --
Acquisition Highlights:
- Iconic boutique resort located in the affluent and high
barriers-to-entry Santa Fe, New
Mexico market proximate to the historic Santa Fe Plaza
- Exceptional amenities including four food & beverage
outlets, an award-winning full-service spa and 7,800 square feet of
indoor/outdoor meeting space
- Revenue per available room (RevPAR) of $155 for the 12 months ended August 31, 2018
- The Property is a member of Marriott's Tribute Portfolio
- Property is in excellent physical condition with limited capex
needs
- In connection with this acquisition, Ashford Inc. has committed
to provide Ashford Trust with approximately $5 million under the terms of the Enhanced Return
Funding Program ("ERFP")
Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford
Trust" or the "Company") today announced that it has entered into a
definitive agreement to acquire the 157-room La Posada de
Santa Fe in Santa Fe, New Mexico ("La Posada" or the
"Property") for $50 million.
The acquisition is expected to close in late October, but because
the transaction is subject to customary closing conditions, the
Company can give no assurance that the purchase will be consummated
by such date, or at all.
La Posada is located on over five beautifully landscaped acres
three blocks from the historic Santa Fe Plaza. With its
strong brand affiliation and world-class amenities, the boutique
hotel is positioned as one of the leading properties in a lodging
market with very high barriers to entry. Located in northern
New Mexico approximately 60 miles
north of Albuquerque, Santa Fe is one of the country's most
prominent, popular and dynamic leisure destinations. Beyond
the first-class hotel experience, guests have easy access to the
Santa Fe area's many amenities and
activities, including over 250 art galleries, boutiques and
restaurants. Additionally, the Property is proximate to the
area's most renowned tourist demand generators, including the
world-famous Santa Fe Opera
House, Georgia O'Keefe Museum,
Museum Hill, Dale Ball Trails and La Tierra Trails, among
others.
La Posada has 157 luxurious and spacious rooms, including 30
suites, spread across 26 structures throughout the resort. The
Property also offers an array of amenities, including the
award-winning 4,500 sq. ft. full-service Spa Sage, four food and
beverage outlets, including the acclaimed Julia – Spirited
Restaurant & Bar, 7,800 sq. ft. of flexible indoor/outdoor
meeting space, an outdoor pool, 24-hour state-of-the-art fitness
club as well as an on-site curator service with prominent paintings
and sculptures displayed for sale throughout the property.
The Property is in excellent physical condition after having
received over $6 million in capital
improvements during the past few years. Post-closing, the property
will be managed by Remington Lodging, who also manages the Hilton
Santa Fe owned by Ashford Trust. The Company expects to
realize synergies from the joint management of La Posada and the
Hilton Santa Fe including the clustering of revenue management
resources, consolidating accounting functions as well as sharing
various positions in sales and human resources.
Inclusive of the funds provided by Ashford Inc. under the ERFP,
and assuming the Ashford Inc. funding were to occur at closing, the
adjusted net purchase price equates to approximately $287,000 per key and represents, as of
August 31, 2018, a trailing 12-month
capitalization rate of 5.3% on hotel net operating income of
$2.4 million and a trailing 12-month
15.2x Hotel EBITDA multiple, according to the Company's preliminary
estimates based on unaudited operating financial data
provided by the sellers. Inclusive of the ERFP funds, the
adjusted net purchase price equates to a forward 12-month
capitalization rate of 7.3% and a forward 12-month Hotel EBITDA
multiple of 11.7x. The Company currently forecasts the
five-year, leverage-neutral IRR on this investment to be
approximately 24% based upon various underwriting, pricing, and
timing assumptions, which are subject to change, and include among
other factors property level mortgage financing, equity investment,
corporate preferred issuance, and ERFP funding. On a trailing
12-month basis as of August 31, 2018,
the Property achieved RevPAR of $155,
with 74% occupancy and an average daily rate (ADR) of $210, according to unaudited operating financial
data provided by the sellers. A reconciliation of non-GAAP
financial measures is included in the financial table below.
"The acquisition of La Posada provides us the opportunity to own
another high-quality asset in this attractive market where we have
been a long-time owner of the Hilton Santa Fe," said Douglas A. Kessler, Ashford Trust's President
and Chief Executive Officer. "We believe that by installing
Remington as manager at La Posada we should be able to realize
significant operational synergies given our existing hotel in the
market that should benefit both properties. Additionally, the
ERFP contribution by Ashford Inc. should serve to increase the
returns on this investment for our shareholders."
Ashford Hospitality Trust is a real estate investment trust
(REIT) focused on investing opportunistically in the hospitality
industry in upper upscale, full-service hotels.
Ashford has created an Ashford App for the hospitality REIT
investor community. The Ashford App is available for free
download at Apple's App Store and
the Google Play Store by searching "Ashford."
Ashford
Hospitality Trust
|
La Posada de Santa
Fe
|
Reconciliation of
Hotel Net Income to Hotel EBITDA and Hotel Net Operating
Income
|
(Unaudited, in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
Months
|
|
|
|
Ended August 31,
2018
|
Hotel Net
Income
|
|
$
1.2
|
|
|
|
|
Adjustment:
|
|
|
|
Depreciation and
amortization
|
|
$
0.7
|
|
Interest
expense
|
|
$
1.0
|
|
|
|
|
Hotel
EBITDA
|
|
$
3.0
|
|
|
|
|
Adjustment:
|
|
|
|
Capital
reserve
|
|
$
(0.6)
|
|
|
|
|
|
|
|
|
Hotel Net Operating
Income
|
|
$
2.4
|
|
|
|
|
|
|
|
|
(1) All
information in this table is based upon unaudited operating
financial data for the prior twelve month
|
period ended August
31, 2018. This data has not been audited or reviewed by the
Company's independent
|
registered public
accounting firm. The financial information presented could
change.
|
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 statements are subject to
numerous assumptions and uncertainties, many of which are outside
Ashford Trust'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 Trust's
filings with the Securities and Exchange Commission.
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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SOURCE Ashford Hospitality Trust, Inc.