Ashford Trust Plans Exit from Select-Service

DALLAS—Ashford Hospitality Trust Inc. said Friday it would focus mainly on upper upscale, full-service hotels from now on, and plans to sell off its select-service properties. To that end, the Dallas-based hotel REIT said it would put a portfolio of 23 select-service properties on the market immediately, with plans to divest the remainder opportunistically in the future.

“Beginning in November 2013, with the spinoff of Ashford Prime, the Ashford Trust strategy has been evolving,” says Monty J. Bennett, AHT's chairman and CEO. “We feel that these changes are another step towards our goal with the Ashford group of companies of having very well-defined, distinct strategies within our investment platforms.”

The portfolio of 23 select-service properties totals 4,308 rooms and is encumbered by approximately $377 million in debt, including $190 million of long term fixed rate debt and approximately $187 million of maturing or floating rate debt. The current trailing 12-month NOI for the portfolio is approximately $44 million, and the trailing 12-month RevPAR for the portfolio is approximately $88. 

The REIT said Friday that it expects to redeploy proceeds from the portfolio sale into adding more upper upscale, full-service properties. In line with the company's new emphasis, GlobeSt.com reported Friday that the REIT had acquired two Minneapolis properties: a 229-room W Hotel and a 60-key Le Meridien, paying $101 million in cash, or about $349,000 per key.

AHT does not plan any further platform spinoffs, according to Friday's announcement. Additionally, the company said its advisor, Ashford Inc., may separately pursue sponsoring a select-service platform.