Ashford has signed a definitive agreement with locally based Day Hospitality Group to acquire a four-property, 365-room portfolio of hotels for about $70,849 per room. Day will receive additional cash if the four properties reach selected net operating income targets by April 30, 2005.

The properties are the 92-room, four-year-old Hampton Inn-Mall of Georgia in suburban Buford, GA; the 96-suite, three-year-old SpringHill Suites by Marriott-Mall of Georgia in northeast Atlanta; the 90-suite, three-year-old SpringHill Suites by Marriott at 3399 Town Point Drive in suburban Kennesaw, GA; and the 87-room, eight-year-old Fairfield Inn & Suites Kennesaw at 3425 Busbee Drive, Kennesaw, GA.

"These four properties exceed our investment criteria and provide a stable initial return with their strong brands and locations, excellent physical condition, close proximity to corporate and leisure demand generators and strong property management," says Ashford president and CEO Monty J. Bennett.

He adds, "The Atlanta market is one we have carefully targeted for some time and we are pleased to add these Marriott and Hilton brands to our portfolio." Bennett says the properties have "strong fundamentals" on which Ashford and Day can "capitalize on the improving demand in the Atlanta submarkets."

The purchase price equates to 9.5 times the total EBITDA thrown off by the four assets on a trailing 12-month basis, according to Ashford's prepared statement. The 9.5 EBITDA multiple is calculated before taking into account any other consideration paid to Day that they earn through higher NOI growth at the properties. "It's similar to an earn-out feature," a local hospitality consultant not associated with the deal, tells GlobeSt.com.

In April, Day Hospitality Group, described by the industry as a boutique-sized management company, walked off with the majority of major awards at the annual Marriott GM Conference. The company was founded in 1994 by industry veterans Peyton Day and Fred Cerrone.