DALLAS, March 3, 2014 /PRNewswire/ --
Acquisition Highlights:
- Purchase price equates to a forward 12-month cap rate of 7.7%
and forward 12-month EBITDA multiple of 11.6x
- Company assumed existing $69
million property level debt financing
- Minimal CapEx needs after recent $12
million renovation
- Key West, FL is the highest
barrier to entry market in the United
States, and the second highest RevPAR market
Ashford Hospitality Prime, Inc. (NYSE: AHP) ("Ashford Prime" or the "Company") today announced
it has completed the acquisition of the 142-room Pier House Resort
and Spa from Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford
Trust") for a total consideration of $92.7
million ($653,000 per
key). In connection with the transaction, the Company has
assumed the existing $69 million
property level debt financing that Ashford Trust closed in
September 2013. The balance of the purchase price was funded
with proceeds from the Company's January equity offering.
On a forward 12-month basis, the purchase price represents a cap
rate of 7.7% on net operating income and an EBITDA multiple of
11.6x. In 2013, the Pier House Resort achieved RevPAR of
$302.76, with 84.6% occupancy and an
Average Daily Rate of $357.86.
The assumed $69 million property
level debt financing has a two-year term and three, one-year
extension options with no test requirements for the first two
extensions. The loan provides for a floating interest rate of
LIBOR + 4.90%, with no LIBOR Floor.
"The Pier House Resort acquisition showcases the deal flow
benefits of our agreements with Ashford Trust regarding option
hotels and right of first offer hotels that fit our investment
guidelines," said Monty J. Bennett,
Ashford Prime's Chairman and Chief
Executive Officer. "This transaction presented a great
opportunity for us given the superb quality of this asset, its
unique location in an attractive market such as Key West, and a recent $12 million dollar renovation completed at the
property which should provide us additional revenue enhancement
opportunities with minimal costs. We look forward to
continuing the build out of Ashford
Prime's portfolio with high RevPAR hotels in gateway and
resort markets similar to the Pier House."
Key West is presently the
nation's 2nd highest RevPAR market. Aside from being
considered one the most desirable vacation spots in the nation,
Key West has seen negligible new
competitive hotel supply in the last 17 years. This is due to
the local Rate of Growth Ordinance "ROGO," which presently sets
extremely high barriers to any new hotel development in Monroe
County. Since Ashford Trust completed the acquisition of the
Pier House in May 2013, it has
experienced continued increases in both RevPAR and Hotel EBITDA
growth. For the quarter ended December
31, 2013, RevPAR growth for the Pier House Resort & Spa
was up 16.8%, Hotel EBITDA margin was up 1,047 basis points, and
Hotel EBITDA increased 56.2% compared to the same quarter in
2012.
Built in 1968, the Pier House Resort and Spa has 142 rooms
including 119 guest rooms and 23 suites. The hotel has 40
waterfront facing rooms and suites with standard guestrooms
averaging 325 square feet and the 23 suites averaging 710 square
feet. Additionally, the hotel offers 2,600 square feet of
meeting space, a 10,000 square foot spa with 10 treatment rooms,
three food and beverage outlets including al fresco dining at
HarborView Cafe and the renowned Chartroom bar, a full-service
fitness facility and a private dock for charter pick-ups. The
hotel is located at the northern end of Duval Street in the heart
of Key West on a 6-acre compound
with a private beach and immediate access to the Gulf of
Mexico. Ashford Prime expects
to incur minimal expenses related to capital improvements given a
$12 million dollar renovation
recently completed at the property.
The Pier House Resort will continue to be managed by Remington
Lodging. Remington currently manages four hotels in
Key West, including the Pier House
Resort & Spa, the Southernmost House, the Inn at Key West and the Crowne Plaza La Concha Hotel,
which is owned by Ashford Trust.
Ashford Hospitality Prime is a real estate investment trust
(REIT) focused on investing in high RevPAR full-service and urban
select-service hotels and resorts located predominantly in domestic
and international gateway markets.
Follow Chairman and CEO Monty
Bennett on Twitter at www.twitter.com/MBennettAshford or
@MBennettAshford.
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, statements about future results,
forward 12-month cap rates and EBITDA multiples, and future capital
expenditure needs. Such statements are subject to numerous
assumptions and uncertainties, many of which are outside
Ashford Prime'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 Prime'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 Prime, Inc.