DALLAS, June 11, 2015 /PRNewswire/ -- Ashford Inc. (NYSE
MKT: AINC) ("Ashford" or the "Company") today announced that it is
providing a total of $6 million in
key money consideration to its managed REITs for two
acquisitions. Ashford Inc. will provide $4 million of key money for the $62.5 million acquisition of the 226-room Le
Pavillon Hotel in New Orleans, LA
by Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust")
and Ashford Inc. will provide $2
million of key money for the $85
million acquisition of the 62-room Bardessono Hotel and Spa
in Yountville, CA by Ashford
Hospitality Prime, Inc. (NYSE: AHP). Ashford Trust also
announced the $56.8 million
acquisition of the W Atlanta Downtown, however, no key money was
provided for that acquisition. The Company anticipates that
it will utilize this key money concept very sparingly going forward
and only in scenarios where its managed REITs could not grow
otherwise.
These are the first acquisitions by Ashford Inc.'s managed REITs
utilizing the new key money concept. "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. Similarly, the Company
believes that this key money concept will provide additional fee
income under its advisory agreements. It is expected that the
managed REITs will have no obligation to pay back the key money,
unless the particular property is sold within a specified period,
in which case the managed REIT would pay back a portion of the key
money.
Ashford Inc. intends to evaluate key money opportunities on a
case by case basis, and anticipates only providing key money when
acquisition of the asset would otherwise not likely be economic for
the managed REITs. The key money concept is designed to help the
Company grow its fee income when it otherwise likely could not.
Ashford Inc. expects that the vast majority of asset
acquisitions by its managed REITs will be done without key
money.
"We are excited to announce the first acquisitions to utilize
the new key money concept," said Monty J.
Bennett, Ashford's Chairman and Chief Executive
Officer. "This key money will only be used on a very
selective basis and only when Ashford Inc. believes the REITs would
not otherwise be able to acquire a particular asset or group of
assets. By selectively using our balance sheet to help our
managed REITs grow, we will be able to increase our assets under
management in scenarios where we otherwise would not be able
to. This growth should result in incremental value creation
for our shareholders."
Ashford is a global asset management company focused on managing
real estate, hospitality, and securities platforms.
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'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'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 Inc.