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Ashford Hospitality Trust Plans to Continue Selling Hotels; Seeks to Divest at
 Least $600 million in Hotels in 2008, Following $312 million in 2007
By Sheryl Jean, The Dallas Morning NewsMcClatchy-Tribune Regional News

Feb. 28, 2008 - The management of Ashford Hospitality Trust Inc., a Dallas-based real estate investment trust, said Thursday that it plans to continue selling hotels and reinvesting the proceeds in debt repayment, mezzanine lending and buying back its stock.

Its 2007 funds from operations rose 74 percent as revenue more than doubled. Its net profit fell 77 percent to $6.2 million, or 6 cents per share, from $26.9 million, or 43 cents per share, in 2006.

Ashford's revenue per available room rose 6 percent in 2007.

Chief executive Monty Bennett said Thursday on a conference call that three research firms project revenue will slow this year to an average gain of 4.7 percent.

This year, Ashford plans to:

--Market up to $2 billion in hotels for sale with hopes to divest at least $600 million. So far this year, Ashford has sold one hotel for $67.5 million. It sold $312 million in hotels last year.

--Reduce its net debt to gross assets ratio to less than 60 percent from 61.5 percent at end of 2007.

--Increase its debt and equity lending through a new joint venture with Prudential Real Estate Investors.

--Spend up to $190 million in capital expenditures, including hotel renovations and other projects under evaluation, compared with $127 million in 2007.

--Continue to buy back stock. Ashford bought back 2.4 million common shares for $18.2 million last year under a $50 million repurchasing plan.

Mr. Bennett said hotel fundamentals remain solid but that the company has contingency plans ready if revenue goals aren't met due to declining demand.

Possible cost-reduction steps include hiring and pay freezes, layoffs and eliminating certain benefits, he said.

Robert W. Baird & Co. analyst David Loeb reiterated an outperform rating on Ashford's stock.

Mr. Loeb wrote Thursday in a report that he's confident Ashford can maintain its quarterly dividend of 21 cents despite a potential economic slowdown.


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