DALLAS, June 11, 2015 /PRNewswire/ --
Acquisition Highlights:
- Purchase price (after adjusting for key money) equates to an
estimated forward 12-month cap rate of 7.8% and an estimated
forward 12-month EBITDA multiple of 11.4x
- Excellent location in CBD and proximate to significant demand
generators
- Hotel to be managed by Remington Lodging
- Ashford Inc. will provide $4.0
million in key money for the acquisition
Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or
the "Company") announced today that it has completed the
acquisition of the 226-room Le Pavillon Hotel for total
consideration of $62.5 million in
cash ($277,000 per key).
Located in the thriving New Orleans,
LA market, the hotel features approximately 7,800 square
feet of meeting space across nine rooms. At closing,
Remington Lodging assumed property management. The Company
also closed on a $43.75 million
non-recourse mortgage loan to finance the acquisition. The
new financing has a two-year term and three, one-year extension
options, subject to the satisfaction of certain conditions.
The loan is interest only and provides for a floating interest rate
of LIBOR + 5.10%.
The purchase price for the Le Pavillon Hotel, after adjusting
for the key money, represents a trailing 12-month cap rate of 5.8%
on net operating income and a trailing 14.8x EBITDA multiple.
On a forward 12-month basis, the purchase price represents an
estimated cap rate of 7.8% on net operating income and an estimated
11.4x EBITDA multiple. On a trailing 12-month basis, the
hotel achieved RevPAR of $127.32,
with occupancy of 74% and Average Daily Rate (ADR) of $171.59.
Located in the heart of downtown New
Orleans, the Le Pavillon Hotel sits adjacent to the historic
French Quarter, only five blocks from the celebrated music clubs of
Bourbon Street and the famous restaurants and antique shops of
Royal Street. The hotel is a five minute walk from the city's
major sporting venues, the Mercedes Benz Superdome and Smoothie
King Arena, as well as only eight blocks from Morial Convention
Center, the largest convention center in Louisiana. Built in
1907, the Le Pavillon Hotel is a member of Historic Hotels of
America, Leading Hotels of the World and has been the recipient of
AAA's four-diamond award since 1996. Additionally, the Le Pavillon
Hotel was named to the "Gold List" by Conde
Nast. The property has 226 spacious and well-appointed
guestrooms. Hotel amenities include the distinguished Crystal
Room Restaurant serving cajun and creole cuisine, the Gallery
Lounge, a business center, valet parking and a rooftop terrace,
pool and fitness facility.
"We are excited to announce this acquisition as the first
Ashford Trust deal to utilize the new key money concept that we
recently announced. We believe this key money concept is a
win-win for both the REIT shareholders and the shareholders of
Ashford Inc. Additionally, this is a key competitive
advantage for Ashford Trust," said Monty J.
Bennett, Ashford Trust's Chairman and Chief Executive
Officer. "The Le Pavillon hotel has an excellent location in
downtown New Orleans, and with its
proximity to the major demand generators in the market, is
well-positioned to continue to capitalize on the strength of the
New Orleans market. With
Remington as the property manager, we see substantial upside to the
operating performance of this property."
This is the first acquisition by the Company to utilize the new
key money concept recently announced by Ashford Inc. Ashford
Inc. will provide $4 million in key
money consideration for the Le Pavillon acquisition. "Key
money" is a common method used by hotel brands whereby a brand will
provide a one-time up-front payment in return for branding the
hotel. This arrangement provides additional fee income under
the brands' long-term franchise or management agreement. It
is expected that the Company will have no obligation to pay back
the key money, unless the property is sold within a specified
period, in which case the Company would pay back a portion of the
key money.
Ashford Inc. and the Company intend to evaluate key money
opportunities on a case by case basis. The Company anticipates only
accepting, and Ashford Inc. anticipates only providing, key money
when acquisition of the asset would otherwise not likely be
economic for the Company. The key money concept is designed to help
the Company grow when it otherwise likely could not. Ashford Inc.
and the Company expect that the vast majority of asset acquisitions
by the Company will be done without key money provided from Ashford
Inc.
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.
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SOURCE Ashford Hospitality Trust, Inc.