DALLAS, Jan. 20, 2015 — Ashford Hospitality Trust, Inc. (NYSE: AHT) (“Ashford Trust” or the “Company”) announced today that it has signed a definitive agreement to acquire the 232-room Memphis Marriott East hotel for total consideration of $43.5 million in cash ($187,500 per key). The acquisition is expected to close within the next 30 days. Upon closing, the property will be managed by Remington Lodging.
The purchase price of $43.5 million represents a trailing 12-month cap rate of 7.6% on net operating income and a trailing 11.6x EBITDA multiple. On a forward 12-month basis, the purchase price represents an estimated cap rate of 8.6% on net operating income and an estimated 10.3x forward EBITDA multiple.
“This transaction was particularly attractive given the hotel’s prime location and market attributes, which include no new competitive supply projected for the submarket and stable corporate demand generators,” said Monty J. Bennett, Ashford Trust’s Chairman and Chief Executive Officer. “Additionally, with the hotel’s recent conversion to a full service Marriott, it has virtually no capex needs. After the installation of our affiliated property manager, Remington Lodging, we expect to achieve continued solid increases in RevPAR penetration as the property stabilizes.”
Located in the heart of East Memphis, the Memphis Marriott East hotel is minutes away from upscale restaurants and shopping and is an ideal choice for guests visiting nearby attractions such as Elvis’ Graceland, Beale Street and Historic Downtown Memphis. The property has 232 well-equipped guestrooms and 6 meeting rooms with approximately 8,960 square feet of meeting space. Hotel amenities include an indoor pool and whirlpool, 24-hour fitness center, Table – A Delta Grill restaurant, and complimentary on-site parking.
Certain statements and assumptions in this press release contain or are based upon “forward-looking” information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. When we use the words “will likely result,” “may,” “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford Trust’s control.
These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: general volatility of the capital markets and the market price of our common stock; changes in our business or investment strategy; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the market in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Ashford Trust’s filings with the Securities and Exchange Commission.
The forward-looking statements included in this press release are only made as of the date of this press release. Investors should not place undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise.
