DALLAS, Aug. 6, 2014 /PRNewswire/ --
Acquisition Highlights:
- Purchase price of $50.0 million
equates to an estimated forward 12-month NOI cap rate of 8.1% and
expected forward 12-month EBITDA multiple of 10.0x
- Hotel acquired at approximately 45% discount to estimated
replacement cost
- Minimal CapEx needs after recent renovation of approximately
$8.1 million
Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or
the "Company") announced today that it has completed the
previously-announced acquisition of the 357-room Fremont Marriott
Silicon Valley hotel for a total consideration of $50 million ($140,000 per key), which is approximately 45%
below estimated replacement cost. The transaction was funded
with a combination of cash on hand and $37.5
million of non-recourse mortgage debt.
On a forward 12-month basis, the purchase price represents an
estimated cap rate of 8.1% on net operating income, which equates
to an expected 10.0x forward EBITDA multiple. On a trailing
12-month basis, the hotel achieved RevPAR of $105.68, with occupancy of 75.6% and an Average
Daily Rate of $139.80.
Remington Lodging took over property management of the hotel
at the closing of the acquisition.
The $37.5 million of non-recourse
mortgage debt has a two-year term and three, one-year extension
options. The loan provides for a floating interest rate of
LIBOR + 4.20%, with no LIBOR Floor.
The hotel is ideally located directly off Interstate 880 at the
gateway to Silicon Valley, home to over 1,200 high-tech, life
sciences and clean technology companies. On a trailing
12-month basis, the Fremont/Newark
submarket has seen RevPAR growth of 16.6% through June 2014.
The robust strength of the Bay Area economy and the continued
growth in the technology sector combined with increasing visitation
to the area is expected to make the Bay Area and Silicon Valley one
of the country's top annual RevPAR growth markets in
2014.
"The Fremont Marriott presented us with a very attractive
investment opportunity and we are excited to complete this
transaction," said Monty J. Bennett,
Ashford Trust's Chairman and Chief Executive Officer. "We see
tremendous upside opportunity for this asset with its desirable
location in a high barrier to entry market that is one of the
nation's fastest growing RevPAR markets being so close to Silicon
Valley. Further, we expect that our affiliated property
manager, Remington Lodging, can significantly enhance the hotel's
operating performance given its proven experience at similar
hotels."
Featuring a sleek, modern facade, the hotel offers 357
well-equipped guestrooms and approximately 15,000 square feet of
meeting space spread across 19 flexible meeting areas including a
7,590 square-foot Grand Ballroom. The hotel's amenities
include an indoor pool and whirlpool, 24-hour fitness center,
theGREATROOM restaurant and lounge, and complimentary on-site
parking. The Fremont Marriott Silicon Valley is in
exceptional condition with minimal capex needs, having recently
undergone an approximate $8.1 million
($23,000 per key) renovation
completed in 2013.
Ashford Hospitality Trust is a real estate investment trust
(REIT) focused on investing opportunistically in the hospitality
industry across all segments and at all levels of the capital
structure primarily within the United States.
Follow Chairman and CEO Monty
Bennett on Twitter at www.twitter.com/MBennettAshford or
@MBennettAshford.
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."
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.
SOURCE Ashford Hospitality Trust, Inc.