Ashford Hospitality Trust sold the 156-room Courtyard by Marriott Savannah (Ga.) Downtown/Historic District and the 128-room Hilton Garden Inn Wisconsin Dells in Wisconsin for $37.8 million. Looking at the 12-month period ending June 30, both hotels’ revenue per available room, at $106 and $75 respectively, stood significantly behind the company’s overall RevPAR of $127.
The combined sales price, inclusive of the buyers' estimated anticipated capital expenditure of $8.2 million, represents a trailing 12-month cap rate of 5.3 percent on net operating income and a 16.2 earnings before interest, taxes, depreciation and amortization multiple as of June 30.
The hotels had allocated loan balances of approximately $32.8 million that were paid off at closing. Ashford also faced an additional $3.8 million of loan pay down associated with the release of the Courtyard by Marriott Savannah Downtown/Historic District from its loan pool. The real estate investment trust used approximately all the sale’s net proceeds to pay down debt.
During the 12-month period ending June 30, the Courtyard by Marriott Savannah Downtown/Historic District achieved 80 percent occupancy and an average daily rate of $132. For that same period, the Hilton Garden Inn Wisconsin Dells achieved 65 percent occupancy and an average daily rate of $116.
"These transactions continue to demonstrate our ability to sell non-core assets at attractive cap rates compared to our current market valuation," Douglas Kessler, Ashford’s president/CEO, said in a statement. "With these sales and the associated debt paydown, we have lowered our leverage while also highlighting the value within our hotel properties. We will continue to pursue transactions that we believe will unlock value in our portfolio and enhance returns for our shareholders."