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Ashford Hospitality Trust Finalizes Acquisition of  30-Hotel Portfolio for $465 Million from CNL Hotels & Resorts


DALLAS, June 20, 2005 - Ashford Hospitality Trust, Inc. (NYSE: AHT) announced it closed on the acquisition of the previously announced 30-property, 4,328-room hotel portfolio from CNL Hotels and Resorts for $465 million in cash. The purchase price equates to a trailing 12-month net operating income capitalization rate of approximately 8.5% on the entire 30-hotel portfolio.

The portfolio consists of 13 Residence Inns by Marriott in nine states; six Courtyards by Marriott in five states; seven TownePlace Suites by Marriott in six states; and four SpringHill Suites by Marriott in three 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 composed 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 seven TownePlace Suites.

The Company funded the transaction with a $370 million 10-year mortgage loan from Merrill Lynch Mortgage Lending, Inc. at a fixed rate of 5.32%, $64,700,997 in net proceeds from the issuance of 6,454,816 shares of Series B-1 Preferred Stock to Security Capital Preferred Growth Incorporated and cash on the balance sheet. This latest issuance of Series B cumulative convertible preferred shares represents all remaining preferred shares committed to be issued under the Convertible Preferred Stock Purchase Agreement dated December 27, 2004, with Security Capital Preferred Growth Incorporated. The preferred dividend is set at the greater of $0.14 per share per quarter or the prevailing quarterly common stock dividend.

In addition, Ashford has exercised its option to sell to Security Capital 2,070,000 shares of common stock for closing to occur on July 1, 2005. This participation right coincides with the January 2005 equity raise.

Acquisition Highlights:
  • Acquired at a trailing 12-month net operating income cap rate of approximately 8.5%
  • Price per key of $107,000
  • Composed of 30 select service Marriott branded and managed hotels in 27 markets across 16 states
  • Fixed-rate financing proceeds of $370 million at 5.32% for 10 years locks in favorable leveraged returns
  • Ashford's direct, core hotel portfolio increases to 77 assets totaling 12,679 rooms
  • Ashford's total investments reach approximately $1.4 billion placing Ashford as one of the larger publicly traded hotel REITs
Security Capital Transaction:
  • Ashford issues to Security Capital Preferred Growth Incorporated all remaining Series B preferred stock under the Convertible Preferred Stock Purchase Agreement with Security Capital representing 6,454,816 shares
  • Ashford issues notice to Security Capital of the exercise of its option to sell 2,070,000 shares of Common Stock with closing set for July 1, 2005
  • After closing on July 1, 2005, no preferred or common stock commitments remain with Security Capital

Ashford Hospitality Trust now owns 77 core hotels containing 12,679 rooms.  Seventy nine percent (79%) of the rooms are Marriott, Hilton, Starwood and Hyatt branded. The Company's total portfolio is 50% full service, and 50% select service. Thirty-one percent (31%) of the portfolio is upper-upscale, 57% upscale, and 12% mid-scale. The Company's direct hotel investments are managed by seven different managers.

Monty J. Bennett, President and CEO of Ashford Hospitality Trust, said, "The timely closing of this transaction, combined with the continued strong performance of the hotels in the portfolio and the attractive financing we secured, has positioned us for strong growth in 2005 and beyond. Our recent decision to increase our second quarter dividend was a direct result of the favorable outlook at these hotels and their expected positive impact on our operations. We are pleased with the diversification this acquisition brings to our portfolio in terms of brand, segment, property managers and geography."

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

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. 


Ashford Hospitality Trust, Inc.
Web Site:

Also See: Ashford Hospitality Trust to Acquire 30-Hotel Portfolio for $465 Million / April 2005
Ashford Hospitality Trust to Acquire 21-Hotel Portfolio for $250 Million; Transaction Increases Management's Ownership Interest in Ashford / January 2005

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