ASHFORD HOSPITALITY TRUST CLOSES PREVIOUSLY ANNOUNCED SALE OF ONE OCEAN RESORT

Rhea-AI Summary

Ashford Hospitality Trust (NYSE: AHT) announced the closure of the sale of One Ocean Resort in Atlantic Beach, Florida.

The sale, which included 193 rooms, will contribute to debt reduction and general corporate purposes. This transaction has lowered the company's net debt to gross assets ratio to 66%, a 400 basis point decrease from earlier this year.

Following this sale, the balance on Ashford's strategic financing stands at $98 million. Additionally, the company has generated $139 million in gross proceeds from the sale of non-traded preferred stock.

Ashford continues to market additional assets at various sales stages.

Positive

• Sale of One Ocean Resort will be used for debt reduction and general corporate purposes.
• Net debt to gross assets ratio decreased by 400 basis points to 66%.
• Strategic financing balance stands at $98 million.
• Raised $139 million from non-traded preferred stock.

Negative

• None.

Insights

Financial Analyst

Ashford Hospitality Trust's recent sale of the One Ocean Resort represents a significant step in its ongoing efforts to reduce debt and strengthen its balance sheet. The proceeds from the sale will be used to decrease the company's net debt to gross assets ratio by 4%, bringing it to approximately 66%. This move is likely to be viewed positively by investors focused on financial stability and risk management.

From a financial perspective, the reduction in the company's strategic financing balance to $98 million and the raise of $139 million from non-traded preferred stock are noteworthy. These actions indicate a well-structured approach to managing capital and reducing leverage—a important aspect for any REIT. Debt reduction enhances the company's ability to weather economic downturns and positions it for potential future growth or acquisitions.

For short-term investors, the immediate improvement in the debt-to-assets ratio could provide a slight boost to stock valuation as reduced leverage typically lowers financial risk. For long-term investors, these moves suggest a commitment to sustainable growth and financial health, which are essential for the stability and future appreciation of their investment.

Market Research Analyst

The sale of the One Ocean Resort comes at a time when the hospitality sector is navigating a complex landscape, marked by fluctuating demand and evolving consumer preferences. By focusing on upper upscale, full-service hotels, Ashford Hospitality Trust is aligning its portfolio with a market segment that tends to be more resilient and profitable, particularly in economic recoveries.

Deploying the proceeds from this sale towards debt reduction and corporate purposes indicates a strategic shift towards a leaner, more agile business model. This approach could help in enhancing the company's competitive edge, enabling it to better capitalize on market opportunities as they arise. Furthermore, the presence of additional assets in the sales pipeline underscores a continued commitment to optimizing the asset portfolio, which can drive long-term value creation.

For investors, understanding the broader strategic context of this sale is critical. It suggests a proactive stance in asset management and a clear direction towards financial prudence and strategic positioning. While this may not translate into immediate stock price surges, it lays a strong foundation for sustainable growth and profitability in the long run.

DALLAS, June 27, 2024 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or the "Company") today announced that it has closed on the sale of the 193-room One Ocean Resort located in Atlantic Beach, Florida.  All proceeds from the sale will be used for debt reduction and general corporate purposes.  With the closing of the sale, the Company's net debt to gross assets now stands at approximately 66%, a 400 basis point reduction from the beginning of the year.  The balance on the Company's strategic financing now stands at approximately $98 million, and the Company has raised approximately $139 million in gross proceeds from the sale of its non-traded preferred stock.  The Company continues to have additional assets in the market at various stages of the sales process. 

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 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 impact does the sale of One Ocean Resort have on Ashford Hospitality Trust's debt?

The sale will contribute to debt reduction, lowering the company's net debt to gross assets ratio to approximately 66%, a 400 basis point reduction.

How much did Ashford Hospitality Trust reduce its net debt to gross assets ratio by?

Ashford Hospitality Trust reduced its net debt to gross assets ratio by 400 basis points, bringing it down to 66%.

What is the current balance on Ashford Hospitality Trust's strategic financing?

Following the sale, the balance on Ashford's strategic financing stands at approximately $98 million.

How much has Ashford Hospitality Trust raised from the sale of non-traded preferred stock?

Ashford Hospitality Trust has raised approximately $139 million in gross proceeds from the sale of non-traded preferred stock.

What are the proceeds from the sale of One Ocean Resort being used for?

The proceeds from the sale are being used for debt reduction and general corporate purposes.