ASHFORD HOSPITALITY TRUST ANNOUNCES ADDITIONAL ASSET SALES

Rhea-AI Summary

Ashford Hospitality Trust (NYSE: AHT) announced the sale of the 90-room Courtyard in Manchester, Connecticut for $8.0 million. The sale helps reduce the company's debt, with the property having a mortgage loan balance of $5.6 million. Additionally, Ashford has agreed to sell the 193-room One Ocean Resort in Atlantic Beach, Florida for $87.0 million, expected to close in June, pending normal closing conditions. Proceeds from both sales will be used for general corporate purposes, including paying down the company's $102 million strategic financing. Ashford's President and CEO, Rob Hays, highlighted the progress in the company's deleveraging plan and mentioned ongoing asset sales in the market.

Positive

• Sale of Courtyard Manchester for $8.0 million reduces debt by $5.6 million.
• Sale agreement for One Ocean Resort at $87.0 million or $451,000 per key.
• Proceeds from sales to be used for general corporate purposes and to reduce strategic financing.
• Progress in deleveraging plan with $102 million remaining on strategic financing.

Negative

• The sale of One Ocean Resort is subject to normal closing conditions and is not guaranteed.
• Potential uncertainty regarding the completion of the One Ocean Resort sale.

Insights

Financial Analyst

Ashford Hospitality Trust has made notable progress in its effort to deleverage and enhance its financial stability. The recent sale of the 90-room Courtyard for $8.0 million, along with the intended sale of One Ocean Resort for $87.0 million, are strategic moves aimed at reducing their debt burden. Specifically, the Courtyard sale allows AHT to pay down a mortgage loan of approximately $5.6 million, indicating a direct benefit to their balance sheet.

From an investor’s perspective, these actions can bolster confidence as they signify proactive steps towards financial prudence. Notably, the per-key price of $451,000 for One Ocean Resort suggests that AHT is optimizing asset value, enhancing investor sentiment.

However, the announcement also specifies that the sale is subject to normal closing conditions, introducing an element of uncertainty. Investors should keep a close watch on the finalization of the One Ocean Resort transaction. The proceeds from these sales being directed towards general corporate purposes and debt repayment further supports the company’s commitment to financial health.

Real Estate Market Analyst

In the context of the real estate market, Ashford Trust’s divestiture aligns with broader trends of REITs optimizing their portfolios by unloading non-core assets. The sale of the Courtyard in Manchester, Connecticut, a smaller property, reflects AHT's focus on full-service, upper upscale hotels. This move highlights a strategic shift towards higher-value assets.

The impending sale of the One Ocean Resort at $451,000 per key is noteworthy, positioning it significantly above the average transaction prices in the sector. It underscores the premium valuation of the property, potentially attracting positive attention from investors who value high asset quality and impressive sale multiples.

While these sales strengthen the company's financial standing, they also denote a reduced geographical footprint. This could impact revenue diversification but might enhance operational focus. Investors should weigh the benefits of debt reduction against the potential revenue stream changes from fewer properties in the portfolio.

DALLAS, June 3, 2024 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or the "Company") today announced that it has closed on the sale of the 90-room Courtyard located in Manchester, Connecticut for $8.0 million. The property was encumbered with a mortgage loan that had an outstanding balance of approximately $5.6 million. All remaining proceeds from the sale will be used for general corporate purposes, including the pay down of the Company's strategic financing.

The Company also announced that it has signed a definitive agreement to sell the 193-room One Ocean Resort located in Atlantic Beach, Florida for $87.0 million ($451,000 per key). The sale is expected to be completed in June and is subject to normal closing conditions. The Company provides no assurances that the sale will be completed on these terms or at all. All proceeds from the planned sale are expected to be used for general corporate purposes, including the pay down of the Company's strategic financing.

"We are pleased to announce the sale of the Courtyard Manchester and the planned sale of the One Ocean Resort," commented Rob Hays, Ashford Trust's President and Chief Executive Officer. "We have made significant progress on our deleveraging plan, and the remaining balance on our strategic financing is currently $102 million. We continue to have several assets in the market at various stages of the sales process and look forward to providing more updates in the coming weeks."

Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing predominantly in upper upscale, full-service hotels.

Forward-Looking Statements

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. Forward-looking statements in this press release include, among others, statements about the Company's strategy and future plans. 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," "could," "plan," or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside of Ashford Trust'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: our ability to complete the sale of One Ocean Resort on the terms currently anticipated or at all; our ability to raise sufficient capital to pay off our strategic financing; our ability to repay, refinance, or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets 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 Trust's filings with the Securities and Exchange Commission.

The forward-looking statements included in this press release are made only as of the date of this press release. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. 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, except to the extent required by law.

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SOURCE Ashford Hospitality Trust, Inc.

FAQ

What recent property sale did Ashford Hospitality Trust (AHT) announce?

Ashford Hospitality Trust announced the sale of the 90-room Courtyard in Manchester, Connecticut for $8.0 million.

How will Ashford Hospitality Trust use the proceeds from the property sales?

The proceeds will be used for general corporate purposes, including paying down the company's strategic financing.

What is the sale value of the One Ocean Resort announced by Ashford Hospitality Trust?

Ashford Hospitality Trust has agreed to sell the One Ocean Resort for $87.0 million, or $451,000 per key.

When is the One Ocean Resort sale expected to close?

The sale of the One Ocean Resort is expected to close in June, subject to normal closing conditions.

How much strategic financing does Ashford Hospitality Trust have left to pay down?

Ashford Hospitality Trust has $102 million remaining on its strategic financing.