The office building, which is attached to the hotel, is 13 years old. To facilitate the marketing and sale of the office component of the property, Ashford utilized a condominium structure for the entire mixed-use property. The office component currently has just one tenant occupying approximately 2,600 sf.

Keystone plans to invest $6 million to redevelop the office structure. The renovation calls for replacing the HVAC system, roof, windows and common areas along with additional tenant improvements.

This is just what Ashford envisioned when it acquired the package, according to Monty J. Bennett, president and CEO, who says the intention was to sell the office building "to a premier office building investor that would commit significant capital investment to the project and further enhance our yield on the hotel asset.

"The sale proceeds are consistent with our previous projections," he says, "which should increase the trailing Ebitda yield from 13.2% to 15.5% and increase the NOI capitalization rate from 11% to 13%." Meanwhile, Ashford's $5.7-million investment in renovations of the hotel is reaching completion. Prospects for the hotel will improve further, Bennett says, after Keystone completes its office renovations "and secures first class tenants."