GlobeSt.com UPDATE: Ashford Puts $250M Hotel Deal to Bed

The selling entities, of which 22% is made up of Ashford's upper management, collected $61,065 per key. The portfolio, with 13 higher-end properties, contains five brands and 4,094 rooms in nine states.

"Given the timing of the completion, we expect this portfolio to begin contributing to our results in the second quarter," Monty J. Bennett, Ashford's president and CEO, says in a press release issued this morning. The value-add play includes a renovation with $30 million dedicated to 13 core properties, valued at $69,700 per key. The plans calls for upgrades to be done by first quarter 2006. Ashford affiliate, Remington Lodging & Hospitality, will operate the hotels. For previous story, click here.

In the portfolio's 3,099-room core component, the Texas hotels are the Embassy Suites Galleria and Hilton NASA/Clear Lake in Houston and Radisson Hotel in Fort Worth. In Florida, the REIT got the St. Petersburg Hilton, West Palm Beach Embassy Suites with the Admiralty Office Building and Key West Crowne Plaza LaConcha. In Massachusetts, the purchase included the Rockland Radisson Hotel Boston/South Shore and Milford Radisson. The Indiana trades are the Airport Radisson in Indianapolis and Radisson Hotel City Centre. Also labeled as core are the Sheraton Minneapolis West in Minnetonka, MN; Beverly Hills Crowne Plaza in Los Angeles; and Historic Inns in Annapolis, MD.

With the ink now dried, Ashford can focus on evaluating all options--including resale--for eight non-core hotels. Under review will be the Holiday Inn in Coral Gables, FL; Best Western in Dallas; Ramada Inn in Warner Robbins, GA; Howard Johnson in Commack and Westbury Howard Johnson in Jericho, both NY assets; and Gull Wing Suites in South Yarmouth, Ramada Inn Regency in South Yarmouth and Falmouth Inn on the Square in Falmouth, all in Massachusetts.

According to Ashford's release, the deal has a trailing 12-month net operating income cap of 9.5% for the entire portfolio. On average, the assumed debt will bear a 7.1% interest rate after a $14.7-million mezzanine loan is retired.

In closing the deal, Ashford's management, labeled minority owners, flipped 100% of their take into operating units priced at $10.07 each that were based on a 20-day average closing price set in December 2004 when the definitive agreement was signed. The Fisher, Getty and Soros entities, representing about 78% ownership, opted for a 50-50 split of cash and operating units.