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Ashford Hospitality Trust to Acquire 30-Hotel Portfolio for $465 Million

(April 27, 2005) -- Ashford Hospitality Trust, Inc. announced it has signed a definitive agreement to acquire a 30-property, 4,328-room hotel portfolio from CNL Hotels and Resorts for $465 million in cash. The purchase price equates to a trailing twelve-month net operating income capitalization rate of approximately 8.4% on the entire 30-hotel portfolio.

The portfolio consists of 13 Residence Inns by Marriott in 9 states; 6 Courtyards by Marriott in 5 states; 7 TownePlace Suites by Marriott in 6 states; and 4 SpringHill Suites by Marriott in 3 states. The hotels in the portfolio have an average age of 8.9 years with a majority of the hotels built between 1997 and 2000. For 2004, the portfolio's occupancy improved by 340 basis points to 75.1%, ADR increased 5.6% to $93.65, and RevPAR increased 10.5% to $70.37. For the first quarter of 2005, RevPAR for the portfolio increased 15.6% over the first quarter 2004. Marriott International will continue to operate the hotels under an incentive management agreement.

For 2005 and 2006, the Company projects investing, including the normal reserves, a total of approximately $34 million in capital expenditures comprised of approximately $18 million to be committed in 2005 and approximately $16 million to be committed in 2006. The scope and completion dates vary by property, but the majority of the work is concentrated in the 13 Residence Inns and the 7 TownePlace Suites.

The Company intends to fund the transaction from several sources including: a financing commitment from Merrill Lynch Mortgage Lending, Inc. for $370 million at a fixed rate locked at 5.32%, undrawn proceeds from Security Capital's remaining convertible preferred or participation in Ashford's January common stock offering, revolver capacity or cash on the balance sheet.

Upon closing, Ashford Hospitality Trust will own 82 hotels containing 13,244 rooms. Seventy-six percent (76%) of the hotels are Marriott, Hilton, Starwood and Hyatt branded. With the addition of these assets to the Company, 50% of the portfolio will be full service, and 50% will be select service. Thirty-one percent (31%) will be upper-upscale, 54% upscale, and 15% mid- scale. The Company's debt will be 77% fixed rate and 23% floating rate. Ninety-five percent (95%) of the total debt is fixed, capped or hedged. The Company's direct hotel investments will be managed by seven different managers.

Monty J. Bennett, President and CEO of Ashford Hospitality Trust, said, "This transaction demonstrates Ashford's broad market strategy of combining solid hotel assets with financial engineering to deliver high returns on invested capital to our shareholders. While our most recent large portfolio transaction was almost entirely full-service, this select service and extended stay acquisition exemplifies the diversity of our investment objectives and market reach. These assets contribute to our growing portfolio of strong RevPAR-performing, geographically-diversified, premier-branded assets. Through this transaction, we have also further diversified our property managers with the addition of Marriott International. With the opportunity for Marriott to participate in an incentive participation structure, we expect Marriott to continue to aggressively expand the RevPAR penetration of these properties within their competitive sets. We are pleased to expand our portfolio with this attractive yielding and diversified portfolio.

"Regarding our existing portfolio, our first quarter RevPAR gains reflect the benefits of our capital expenditures and aggressive asset management. We acquired our assets at going-in yields at the high end of our targeted range and continue to see acceleration in performance."

Ashford Hospitality Trust is a self-administered real estate investment trust focused on investing in the hospitality industry across all segments and at all levels of the capital structure, including direct hotel investments, first mortgages, mezzanine loans and sale-leaseback transactions. Additional information can be found on the Company's web site at

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