Ashford Hospitality Trust has signed a definitive agreement to acquire the 357-room Fremont Marriott Silicon Valley hotel in California. The acquisition is expected to close within the next 30 days. The company intends to finance the property with approximately $37.5 million of non-recourse mortgage debt.
Located in the Silicon Valley submarket of the Bay Area in Northern California, the hotel has approximately 15,000 square feet of meeting space spread across 19 flexible meeting areas. Upon closing, the property will be managed by Remington Lodging.
"We are very excited with this acquisition considering its significant upside potential. As the only full-service hotel in Fremont, the Fremont Marriott is well positioned within the marketplace to draw corporate demand from neighboring companies in Silicon Valley and the surrounding Bay Area," said Monty J. Bennett, Ashford Trust's chairman and CEO. "This hotel offered us an exceptional opportunity. It has a prime location in a high barrier to entry market, and the property recently completed a renovation allowing it to provide best-in-class product quality and services. With the ability to install our affiliated property manager, Remington Lodging, as the new property manager for the hotel, we expect the operating performance of the hotel to improve significantly."
On a trailing-12 month basis, the Fremont/Newark submarket has seen RevPAR growth of 15.4 percent through May 2014. The strength of the Bay Area economy and the continued growth in the technology sector combined with increasing visitation to the area is expected to make the Bay Area and Silicon Valley one of the country's top annual RevPAR growth markets in 2014.
The hotel's most recent renovation was an approximate $8.1-million ($23,000 per key) renovation and PIP completed in 2013.