ASHFORD HOSPITALITY TRUST PROVIDES UPDATE ON ASSET SALES AND DELEVERAGING PLAN
Ashford Hospitality Trust, Inc. (NYSE: AHT) announced the sale of the 85-room Hampton Inn in Lawrenceville, Georgia for $8.1 million, representing a 6.0% capitalization rate. Proceeds will be used for corporate purposes and strategic financing. The Company transferred possession of hotel properties to a court-appointed receiver. Ashford Trust is progressing on its deleveraging plan.
Successful sale of the 85-room Hampton Inn in Lawrenceville, Georgia for $8.1 million.
Proceeds from the sale will be used for general corporate purposes and strategic financing.
Transfer of possession of hotel properties securing the KEYS A and KEYS B Loan Pools to a court-appointed receiver.
Loss of economic interest in operations of KEYS A and KEYS B Loan Pool Hotels due to the transfer.
Consensual foreclosure or deed in lieu of foreclosure on the properties since July 2023.
Insights
The sale of the Hampton Inn in Lawrenceville represents a capitalization rate of
The transfer of possession and control of properties in KEYS A & B Loan Pools to a receiver is also noteworthy as it indicates a strategic shift in Ashford Trust's portfolio. The decision to cooperate with the servicer for a consensual foreclosure or deed in lieu of foreclosure will likely alleviate some of the company's debt obligations and could be viewed as a proactive approach to improving the balance sheet. However, it also means Ashford Trust is relinquishing any potential future economic benefits from these properties. Investors should weigh the immediate relief in financial pressure against the long-term loss of income from these assets.
When considering Ashford Hospitality Trust's place within the REIT sector, it is important to note that the focus on upper upscale, full-service hotels subjects the trust to the cyclicality of the hospitality industry. By announcing asset sales as part of a deleveraging plan, Ashford is signaling a strategic realignment and risk management approach. This could be viewed positively by the market, as it suggests a commitment to maintaining a healthy debt-to-equity ratio, which is important for the stability of a REIT.
Moreover, with the commitment to further updates on the sales process of other assets, the trust is maintaining transparency, which is often appreciated by investors. The success of this deleveraging strategy will largely depend on the market's reception of their assets' valuation, the timing of the sales and the execution of subsequent reinvestment or debt reduction strategies. Positive outcomes from these activities could potentially enhance investor confidence in the trust's management and future prospects.
The Company also announced the transfer of the Company's possession and control of the hotel properties securing the
KEYS A Loan Pool Hotels:
Courtyard Columbus Tipton Lakes –
Courtyard Old Town –
Residence Inn Hughes Center –
Residence Inn Phoenix Airport –
Residence Inn San Jose Newark –
SpringHill Suites Manhattan Beach –
SpringHill Suites Plymouth Meeting –
KEYS B Loan Pool Hotels:
Courtyard
Courtyard Newark Silicon Valley –
Courtyard Oakland Airport –
Courtyard Plano Legacy Park –
Residence Inn Plano –
SpringHill Suites BWI Airport –
TownePlace Suites Manhattan Beach –
"We are pleased with the progress we have made on our deleveraging plan, including the transfer of the KEYS A&B loan pool assets to the receiver," said Rob Hays, Ashford Trust's President and Chief Executive Officer. "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 raise sufficient capital to pay off our strategic debt; 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
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