Ashford Hospitality Trust has signed a definitive agreement to acquire the 237-room W Atlanta Downtown hotel for $56.8 million, or $239,000 per key, another recent acquisition for AHT, which has been expanding its portfolio of late. AHT said it intends to finance the property with approximately $45.4 million of non-recourse mortgage debt. Post-closing, the hotel will continue to be managed by Starwood.
The purchase price represents a trailing 12-month cap rate of 6.4 percent on net operating income and a trailing 13.1x EBITDA multiple. On a forward 12-month basis, the purchase price represents an estimated cap rate of 7.2 percent on net operating income and an estimated 11.6x EBITDA multiple. On a trailing 12-month basis, the hotel achieved RevPAR of $147.97 with occupancy of 73.2 percent and ADR of $202.24.
"We are very excited about the acquisition of the W Atlanta Downtown as the hotel's central location in this thriving market offered us an extremely attractive opportunity, and we see substantial upside potential for this property. The W Atlanta Downtown is ideally located to draw corporate demand from the many Fortune 500 companies that call the Atlanta metropolitan area home," said Monty J. Bennett, Ashford Trust's Chairman and CEO. "This acquisition is consistent with our strategy of identifying well-located assets in attractive markets, and we will continue exploring similar transactions to drive the exceptional shareholder returns for which our team is known."
The hotel, which has more than 9,000 square feet of meeting space, is closely situated to several attractions including the Civil Rights Museum, the Atlanta Aquarium, the World of Coca Cola Children's Museum of Atlanta, the Georgia Dome, the College Football Hall of Fame and Centennial Olympic Park.
In addition to this acquisition, AHT also announced it has completed the acquisition of the 226-room Le Pavillon Hotel in New Orleans for a total consideration of $62.5 million in cash ($277,000 per key).
"We are excited to announce this acquisition as the first Ashford Trust deal to utilize the new key money concept that we recently announced. We believe this key money concept is a win-win for both the REIT shareholders and the shareholders of Ashford Inc. Additionally, this is a key competitive advantage for Ashford Trust," said Monty J. Bennett, Ashford Trust's Chairman and Chief Executive Officer. "The Le Pavillon hotel has an excellent location in downtown New Orleans, and with its proximity to the major demand generators in the market, is well-positioned to continue to capitalize on the strength of the New Orleans market. With Remington as the property manager, we see substantial upside to the operating performance of this property."
This is the first acquisition by the company to utilize the new key money concept recently announced by Ashford Inc. Ashford Inc. will provide $4 million in key money consideration for the Le Pavillon acquisition.
In May, Ashford also 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.