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Ashford Hospitality Trust in Dallas Finalizes Sale, Surrenders Control of 14 Properties

Wednesday, May 1, 2024

Ashford hospitality trust, georgia hotel,

Ashford Hospitality Trust sells Georgia hotel, relinquishes control of 14 properties, announces leadership change, and financial restructuring.

Based in Dallas, Ashford Hospitality Trust (AHT) recently completed the divestiture of a hotel property in Georgia and relinquished control of 14 additional hotels from two separate loan portfolios to their respective loan servicers.

AHT finalized the transaction for the 85-room Hampton Inn located in Lawrenceville, Georgia, selling it for $8.1 million, which translates to $95,300 per room. This transaction reflects a 6% capitalization rate based on the net operating income of the last 12 months up to March 2024.

In a previous announcement last July, AHT indicated it would likely surrender 19 underperforming hotel properties to their loan servicers. By December, the trust had already transferred ownership of five such properties across Arizona, California, Georgia, New Jersey, and North Carolina to the lenders. Since that announcement, AHT has been engaging with the servicers to facilitate a smooth process for either foreclosure or deeds in lieu of foreclosure for these properties, stating that it no longer holds any economic interest in their operations.

The properties are divided between two major loan groups: a $180.7 million loan portfolio known as “KEYS A” and a $174.4 million portfolio termed “KEYS B.”

The “KEYS A” portfolio includes:

The “KEYS B” portfolio comprises:

Additionally, AHT recently announced that Hays will resign from his position on June 30, with Stephen Zsigray, currently the SVP of corporate finance and strategy, set to take his place.

Earlier in April, Ashford Inc., an advisor to both Ashford Hospitality Trust and another NYSE-listed REIT, Braemar Hotels & Resorts, revealed plans to withdraw its common stock from NYSE trading this summer, aiming to save $2.5 million annually. On April 1, it disclosed that its board had green-lit a plan to terminate its common stock under federal securities regulations after a proposed reverse stock split, immediately followed by a forward stock split.

In late March, an activist investor, New York City-based Blackwells Capital, initiated a challenge to the board of Braemar Hotels & Resorts by nominating candidates for half of its board seats following an unsuccessful acquisition attempt in December. Braemar responded by rejecting these nominations.

During its fourth-quarter earnings call in late February, AHT announced the sale of the 390-room Hilton Boston Back Bay for $171 million to an undisclosed buyer and reported operating losses of $13.3 million for the quarter and $31.3 million for the year 2023. At this time, AHT also shared updates on its strategy to address strategic financing obligations maturing in January 2026, including plans to enhance capital through the sale of assets, refinancing of mortgage debts, and raising non-traded preferred capital, with 12 hotels listed as potentially available for sale.

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