DALLAS, Nov. 1, 2017 /PRNewswire/ -- Ashford
Hospitality Prime, Inc. (NYSE: AHP) ("Ashford Prime" or the "Company") announced today
that it has closed on the sale of the 404-room Marriott Plano
Legacy Town Center hotel ("Marriott Plano" or the "Hotel") in
Plano, Texas for $104 million ($257,000 per key). The sales price represents a
year-end 2017 all-in cap rate of 7.7% on net operating income and a
year-end 2017 11.1x all-in Hotel EBITDA multiple. The closing
of the sale also completed a reverse 1031 exchange that was
initiated to acquire the Hotel Yountville.
The sale of the Marriott Plano is another meaningful step in the
execution of the Company's non-core portfolio strategy that it
announced in January. This transaction follows the Company's
June announcement that it had reached an agreement to convert its
Courtyard Philadelphia Downtown hotel to an Autograph Collection
property.
As the Marriott Plano is the lowest RevPAR asset in the
Company's portfolio, the Company's pro forma RevPAR after this
transaction should increase and be significantly higher than any of
its peers, making the Company the publicly-traded lodging REIT with
the highest RevPAR and highest asset quality. Additionally,
the sale of the Hotel will reduce the Company's leverage and reduce
its interest expense by approximately $3.2
million annually.
The hotel had an existing allocated debt balance of
approximately $62.3 million that was
paid off at closing along with an additional $22.7 million of debt pay down used to release
the asset from its loan pool. After debt payoff and
transaction costs, the net proceeds were approximately $16 million. Based upon the prior 12-month
period, the Marriott Plano achieved RevPAR of $134 with occupancy of 72% and Average Daily Rate
of $185. A reconciliation of non-GAAP
financial measures is included in the financial table
below.
"The Marriott Plano transaction is another significant step in
the rationalization of our non-core hotel portfolio," said
Richard J. Stockton, Ashford Prime's President and Chief Executive
Officer. "As the Plano market is
experiencing a significant amount of new supply that will likely
negatively impact the Marriott Plano, our 'rebuy' analysis resulted
in a lower unlevered and levered IRR than what we believe we can
achieve by redeploying the proceeds based on the acquisition
opportunities we are currently seeing in the market. Given
these dynamics, we believe the sale of this asset will be accretive
to shareholder returns."
Ashford Hospitality Prime is a real estate investment trust
(REIT) focused on investing in luxury hotels and resorts.
Ashford has created an Ashford App for the hospitality REIT
investor community. The Ashford App is available for free
download at Apple's App Store and
the Google Play Store by searching "Ashford."
Ashford
Hospitality Prime
|
Marriott Plano
Legacy Town Center
|
Reconciliation of
Hotel Net Income to Hotel EBITDA and Hotel Net Operating
Income
|
(Unaudited, in
millions)
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
12
Months
|
|
|
|
Ended December
31,
|
|
|
|
2017
|
Hotel Net
Income
|
|
$
3.5
|
|
|
|
|
Adjustment:
|
|
|
|
Depreciation and
amortization
|
|
$
4.9
|
|
Interest
expense
|
|
$
2.4
|
|
|
|
|
Hotel
EBITDA
|
|
$
10.7
|
|
|
|
|
Adjustment:
|
|
|
|
Capital
reserve
|
|
$
(1.6)
|
|
|
|
|
|
|
|
|
Hotel Net Operating
Income
|
|
$
9.1
|
|
(1) All information in
this table is based upon unaudited operating financial data for the
first seven months of 2017 along with a Company forecast for the
remaining five months of 2017. This data has not been
audited, reviewed or compiled by the Company's independent
registered public accounting firm, and therefore the financial
information presented will likely change.
|
EBITDA is defined as net income (loss), computed in
accordance with generally accepted accounting principles ("GAAP"),
before interest, taxes, depreciation and amortization. Hotel
EBITDA multiple is defined as the purchase price divided by
EBITDA. A capitalization rate is determined by dividing the
property's annual net operating income by the purchase
price. Net operating income is the property's hotel EBITDA
minus a capital expense reserve of either 4% or 5% of gross
revenues. Funds from operations ("FFO"), as defined by the White
Paper on FFO approved by the Board of Governors of the National
Association of Real Estate Investment Trusts ("NAREIT") in
April 2002, represents net income
(loss) computed in accordance with generally accepted accounting
principles ("GAAP"), excluding gains (or losses) from sales of
properties and extraordinary items as defined by GAAP, plus
depreciation and amortization of real estate assets, and net of
adjustments for the portion of these items related to
unconsolidated entities and joint ventures.
Certain statements and assumptions in this press release
contain or are based upon "forward-looking" information and are
being made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risks and
uncertainties. When we use the words "will likely result,"
"may," "anticipate," "estimate," "should," "expect," "believe,"
"intend," or similar expressions, we intend to identify
forward-looking statements. Such statements are subject to
numerous assumptions and uncertainties, many of which are outside
Ashford Prime's control.
These forward-looking statements are subject to known and
unknown risks and uncertainties, which could cause actual results
to differ materially from those anticipated, including, without
limitation: timing of closing of the transaction and
satisfaction of conditions to closing, general volatility of the
capital markets and the market price of our common stock; changes
in our business or investment strategy; availability, terms and
deployment of capital; availability of qualified personnel; changes
in our industry and the market in which we operate, interest rates
or the general economy; and the degree and nature of our
competition. These and other risk factors are more fully
discussed in Ashford Prime's filings
with the Securities and Exchange Commission.
The forward-looking statements included in this press release
are only made as of the date of this press release. Investors
should not place undue reliance on these forward-looking
statements. We are not obligated to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or circumstances, changes in
expectations or otherwise.
View original
content:http://www.prnewswire.com/news-releases/ashford-prime-announces-sale-of-marriott-plano-legacy-300547916.html
SOURCE Ashford Hospitality Prime, Inc.