Ashford Hospitality is closing out a week full of large portfolio deals with a smaller, yet not unsignificant transaction. Zacks reported that Ashford signed a deal to acquire a selection of nine hotels for $224 million, which includes eight select-service hotels and a one full-service property for a total of 1,251 rooms.
Ashford plans to utilize non-recourse debt of approximately $179 million to finance the deal, and as part of the transaction the properties will be managed by Remington Lodging. Zacks reported that the purchase price is equal to forward 12-month cap rate of 7.5 percent on net operating income and a forward 11.6 times EBITDA multiple. The properties have an average age of seven years, and the portfolio is spread across seven states.
According to the Phoenix Business Journal, the Hampton Inn Phoenix Airport was counted among the hotels picked up by Ashford. In the last year, the nine hotels purchased by Ashford had a 79 percent occupancy rate and an average daily rate of $131. The revenue per available room for the nine hotels was $100 in the last 12 months.
This is Ashford's largest spot of investment activity since it acquired the Highland Hospitality portfolio for $1.75 billion in mid-March. Ashford borrowed $1.07 billion in non-recourse mortgage to complete the acquisition, which included 28 hotels, 19 full-service and nine select-service and were purchased from Prudential Real Estate Investors for $215,000 per room.