Ashford Puts Five Hotels Up for Sale
JUNE 7, 2005. Ashford Hospitality Trust today announced it has placed five non-core hotels under contract for sale to four separate buyers for a total sale price of $29.85 million. Three of the closings are expected to take place in June 2005 for total proceeds of $18.85 million, and the remaining closing is expected to occur prior to December 31, 2005 for total proceeds of $11 million. All of the buyers have deposited non-refundable earnest money to secure the contracts.
Acquired by Ashford in March 2005 as part of a 21-hotel portfolio, the 168-room Holiday Inn Coral Gables in Coral Gables, FL, the 72-room Inn on the Square in Falmouth, MA, the 136-room Gull Wing Suites in South Yarmouth, MA, the 110-room Howard Johnson Commack in Commack, NY, and the 80-room Howard Johnson Westbury in Westbury, NY, had been designated as non-core properties along with three other hotels in this portfolio (which have since been sold). Four of the eight hotels had a trailing twelve-month negative net operating income. Following the completion of these sales the remaining 13-core hotels will have been acquired for a purchase price equal to $212.5 million and as of April 2005 the trailing twelve month net operating income cap rate is 11% and the trailing twelve month EBITDA yield is 13%. Upon the sale closings, Ashford will have completed its disposition strategy for all eight non-core hotels. CB Richard Ellis and Molinaro Koger brokered the transactions for Ashford.
Monty J. Bennett, President and Chief Executive Officer of Ashford, commented, "With these latest agreements, we are on track to finalize the disposition of all eight non-core assets for a total sale price of nearly $9 million higher than we had originally anticipated. The net proceeds from these dispositions will be redeployed to properties offering better total returns to our shareholders. The sale of these properties in such a timely and accretive fashion further demonstrates our proven ability to enhance the value of portfolio transactions while remaining true to our stated investment strategy."
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