DALLAS-Ashford Hospitality Trust Inc. has signed an agreement to acquire a 21-property, 4,094-room hotel portfolio for $250 million. The seller is entities controlled by affiliates of the Fisher Brothers, the Gordon Getty Trust and George Soros collectively as majority partners, and certain members of Ashford’s senior management team as minority partners. The acquisition, which is expected to close by February 2005, will be funded by private placement of up to $75 million in cumulative convertible preferred stock with Security Capital Preferred Growth Inc.

“This transaction substantially increases our asset base and market capitalization and reflects strong investor confidence in our business plan,” says Monty J. Bennett, president and CEO of Ashford. “Our percentage of full-service, upper-upscale and upscale assets will increase thereby improving Ashford’s position for growth going forward, while providing additional brand and geographic diversification.”

The acquisition will boost Ashford’s direct hotel portfolio to increase to 54 assets totaling 9,189 rooms, according to the REIT. Of the 21-property portfolio acquisition, Ashford considers 13 hotels as core assets, consisting of five brands and one independent totaling 3,099 rooms: Houston Embassy Suites Galleria in Houston; Houston Hilton NASA/Clearlake, also in Houston; Fort Worth Radisson in Fort Worth; St. Petersburg Hilton in St. Petersburg, FL; West Palm Beach Embassy Suites and Admiralty Office Building in West Palm Beach, FL; Key West Crowne Plaza LaConcha in Key West, FL; Sheraton Minneapolis West in Minnetonka, MN; Beverly Hills Crowne Plaza in Los Angeles; Rockland Radisson Hotel Boston/South Shore in Rockland, MA; Milford Radisson in Milford, MA; Indianapolis Airport Radisson Hotel in Indianapolis; Indianapolis Radisson Hotel City Centre, also in Indianapolis; and the Historic Inns in Annapolis, MD.

The core portfolio is current undergoing an estimated $35-million to $40-million capital improvement plan, which will be completed under Ashford’s ownership by early 2006. Remington Lodging & Hospitality, an affiliate of the current manager of the properties, will operate the hotels.

Ashford is evaluating strategic alternatives for the remaining eight hotels that contribute less than 3.5% of the total portfolio’s NOI. The strategic alternatives for these smaller assets include a potential sale, repositioning or rebranding. These hotels include: Coral Gables Holiday Inn in Coral Gables, FL; Warner Robins Ramada Inn in Warner Robins, GA; Yarmouth Gull Wing Suites in South Yarmouth, MA; Hyannis Ramada Inn Regency in Hyannis, MA; Falmouth Inn on the Square in Falmouth, MA; Commack Howard Johnson in Commack, NY; Westbury Howard Johnson in Jericho, NY; and Dallas Best Western in Dallas.

The acquisition price of $250 million is comprised of $35 million in cash, the issuance of $50.3 million in operating partnership units and the assumption of $164.7 million in debt. The purchase price will result in an EBITDA yield of 11.2% and a trailing 12-month net operating income cap rate of 9.3%.

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