Dallas-based Ashford Hospitality Trust completed the $1.75-billion buyout of the Highland Hospitality portfolio.
According to the Free Observer, Ashford borrowed $1.07 billion in non-recourse mortgage to complete the acquisition, which included 28 hotels, 19 full-service and nine select-service. The properties were purchased from Prudential Real Estate Investors. The transaction valued the hotels at $215,000 per room, and the properties included brands such as Hilton, Marriott, Hyatt and Starwood.
"We were able to take advantage of the favorable debt markets to complete a refinancing of the majority of assets in the portfolio on attractive terms," Monty J. Bennett, chairman and CEO of Ashford Hospitality Trust, told the Dallas Business Journal. "This acquisition and concurrent financing is another example of our team's continued ability to find ways to unlock value within our portfolio."
Ashford previously owned 71.74 percent of the Highland portfolio, and the REIT announced plans in December to snap up the remaining 28.26 percent. Deric Eubanks, CFO of Ashford Hospitality Trust, told the Dallas Business Journal that the not many changes are expected to take place in the portfolio's operations after the close of the sale.
"The strategy doesn't really change," Eubanks said. "We've put a lot of capital expenditures into the hotels over the last few years. We've had growth initiatives and we want to magnify the strength of the program."
At the tail end of last month, Ashford also acquired the 232-room Marriott Memphis East for $43.5 million (or $187,500 per key), with plans to finance to property with around $33.3 million of non-recourse mortgage debt, according to Street Insider. Ashford also kicked off January with an early Texas acquisition, buying the 168-room Lakeway Resort & Spa in Austin for $33.5 million, or $199,000 per key.