DALLAS, Dec. 19, 2014 /PRNewswire/ -- Ashford Hospitality
Trust, Inc. (NYSE: AHT) ("Ashford Trust" or the "Company") and
Prudential Real Estate Investors announced today they have signed a
definitive agreement in which Ashford Trust will acquire the
remaining 28.26% ownership interest of the Highland Hospitality
portfolio from its joint venture partner, a value-add fund (the
"Fund") managed by PREI. Ashford Trust currently has a 71.74%
ownership interest in the joint venture. Ashford Trust's
buyout will be funded with cash and is expected to be completed
sometime during the first quarter of 2015, subject to customary
closing conditions, and simultaneous with an anticipated
refinancing of the Highland portfolio. At the end of the
third quarter, Ashford Trust had net working capital of
$547 million. Ashford Inc.
(NYSE MKT: AINC) will become the advisor on the remaining
28.26% of the Highland portfolio.
The 28-hotel Highland Hospitality portfolio includes 19
full-service hotels and nine select-service hotels with a
concentration in major brands such as Hilton, Marriott, Hyatt and
Starwood. The expected total transaction value is
$1.735 billion ($215,000 per key). The purchase of the
Fund's interest, which will be made by a cash payment of
$250.1 million, includes the Fund's
28.26% equity ownership, its preferred equity position, as well as
the Fund's share of the venture's net working capital
balance. The purchase price represents a trailing 12-month
cap rate of 6.9% on net operating income and a trailing 12.5x
EBITDA multiple. On a forward 12-month basis, the purchase
price represents a cap rate of 7.4% on net operating income and an
11.6x forward EBITDA multiple.
"We are very pleased to acquire the remaining ownership interest
of this high quality hotel portfolio whose performance has well
exceeded our expectations," said Monty J.
Bennett, Ashford Trust's Chairman and Chief Executive
Officer. "With the strong hotel fundamentals the industry is
experiencing, we expect to benefit from further upside in this
portfolio and believe this as a very attractive investment
opportunity. I would also like to thank PREI for a productive
partnership over the past six years. Throughout the life of
this venture, PREI has been a valued partner, contributing
extensively to the value creating initiatives implemented over the
past few years. Looking ahead, we intend to continue to work
to maximize our investment in the portfolio."
Soultana Reigle, Managing
Director at PREI said, "The sale of our fund's ownership interest
in the Highland Hospitality portfolio represents an excellent
outcome for our investors. We are extremely pleased with the
value that PREI and Ashford Trust have been able to add to the
portfolio throughout our joint venture ownership."
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."
Prudential Real Estate Investors is the global real estate
investment business of Prudential Financial, Inc. (NYSE: PRU).
Investing in real estate on behalf of institutional clients since
1970, PREI® today has more than 650 employees located in
20 cities around the world, and gross assets under management of
$59.3 billion ($43.7 billion net) as of June 30, 2014. PREI offers to its global
client base a broad range of real estate investment vehicles across
the risk-return spectrum and geographies, including core, core
plus, value-add, opportunistic, debt, securities, and specialized
investment strategies. For more information, visit
www.prei.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 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.; Ashford Inc.