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DALLAS-Ashford Hospitality Trust Inc. will sell eight Residence Inns acquired in June to Schuylkill LLC in a $102-million deal that earned the seller an 8.9% capitalization rate in its five months of ownership.

In a statement announcing the transaction, the hospitality REIT says the deal will transfer ownership of non-core Generation One Residence Inns in Texas, Rhode Island, Michigan, New York, Florida, California and Delaware to Schuylkill within the next 60 days. The hotels, all older properties and most of which were built between 1997 and 2000, were sold as part of locally based company’s plan to recycle its capital, Ashford says in a statement.

All eight hotels were acquired in June after Ashford paid $465 million in cash to Orlando-based CNL Hotels & Resorts Inc. in exchange for a portfolio of 30 Marriott branded hotels in 16 states. Ashford says it plans to sell off another seven non-core hotels from the portfolio later. Two others, both Howard Johnson’s, are expected to close by the end of this year.

Joseph McCann, president of Optimum Hotel Brokerage in Fairfield, CT, tells GlobeSt.com that the transaction appears to be beneficial to both parties. “That’s a hell of a deal,” says McCann, noting that the $102-million deal required a down payment of only $11 million from the buyer and brought in a substantial cap rate for Ashford. “To pay a nearly 9% cap rate is a good deal for both sides,” McCann says.

A spokesman for Ashford tells GlobeSt.com that the company plans to reallocate proceeds from the sale into its other investments. This has been a key strategy of theirs, to reallocate the capital,” he says. It was unclear, however, how the REIT would use the proceeds from the sale.

In the statement issued yesterday, however, Monty J. Bennett, president and chief executive officer of Ashford, says that the sale demonstrates the firm’s pro-active approach to recycling capital. “Our strategy to sell these hotels combined with the favorable financing we arranged enhances the returns on the remaining higher quality assets. We intend to remain a recycler of capital rather than a property aggregator,” Bennett says. “In doing so, we expect to better match potential sources and uses of capital to achieve dividend and CAD growth as well as increased shareholder returns.”

Officials from Ashford were unavailable for comment on the transaction and representatives from Schuylkill could not be reached.

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