More details will be forthcoming. According to this morning's press release about the signing of a definitive agreement, Ashford's takeover will bring a $34-million renovation, spread out over two years, for the package, which will continue to be operated by the Washington, DC-headquartered Marriott International Inc. on an incentive management agreement. The portfolio consists of 13 Residence Inns by Marriott in nine states; six Courtyards by Marriott in five states; seven TownePlace Suites by Marriott in six states; and four SpringHill Suites by Marriott in three states. The hotels' average fundamentals are 8.9 years old; 75.1% occupancy; $93.65 ADR; and a 15.6% hike in RevPar for the first-quarter comparison of this year to 2004. According to Ashford, the portfolio's purchase price equates to an 8.4% cap rate based on a trailing 12-month net operating income.
Ashford will fund the portfolio play from a $370-million financing commitment from Merrill Lynch Mortgage Lending Inc., proceeds from a common stock offering in January and a revolving line of credit plus cash on hand. "While our most recent large portfolio transaction was almost entirely full-service, this select service and extended stay acquisition exemplifies the diversity of our investment objectives and market reach," Monty J. Bennett, Ashford president and CEO, says in the release.
When the deal closes, Ashford will own 82 hotels with 13,244 rooms, of which 76% are flying Marriott, Hilton, Starwood and Hyatt flags. The REIT says CNL acquisition creates an evenly balanced portfolio of full-service and select-service hotels.
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