Will Re-Brand Luxury Hotel to JW Marriott
Acquisition Highlights:
- Acquired for $95.0 million in cash with a forward twelve-month
NOI cap rate of 6.5%, EBITDA multiple of 12.2x, and EBITDA yield
of 8.2%
- Will re-brand hotel to JW Marriott and invest $10 million in
renovations
- Ashford's direct hotel portfolio to increase to 72 assets
totaling 12,266 rooms
DALLAS, April 19 /PRNewswire-FirstCall/ -- Ashford Hospitality Trust, Inc.
(NYSE: AHT) announced it has completed the acquisition of the Pan Pacific San
Francisco Hotel in San Francisco, CA, for $95.0 million in cash ($281,065 per
key) from a partnership between Oxford Lodging Advisory & Investment Group,
LLC and Whitehall Street Global Real Estate Limited Partnership 2001 and
affiliates which acquired the hotel in August 2003. The Company also announced
it has signed an agreement with Marriott International, Inc. (NYSE: MAR) to
re-brand the 338-room hotel as the JW Marriott Hotel San Francisco. Marriott
will manage the hotel under a long-term incentive-based management agreement.
Re-branding of the hotel to JW Marriott and other renovation work, which
will consist of revenue enhancing upgrades to meeting space, rooms and food
and beverage facilities, will commence immediately. Ashford expects to invest
approximately $10 million in the re-branding and renovation of the hotel,
which is expected to be completed by December 2007. The Company also intends
to explore the value-added possibility of converting the hotel's existing
Executive Conference Center to a high-end bar/restaurant, retail or downtown
day spa concept later in the year.
On a forward twelve-month basis, the purchase price equates to a 12.2x
EBITDA multiple, an EBITDA yield of 8.2% and a net operating income
capitalization rate of 6.5% with projected revenues of $32 million. The
purchase price equates to a trailing twelve-month net operating income
capitalization rate of 3.9% and a 5.0% EBITDA yield. The property generated
revenues of $25.5 million for the calendar year 2005.
Located at the corner of Post and Mason Streets in the Union Square
district, the Mobil four-star, AAA four-diamond hotel is within walking
distance to world famous San Francisco destinations such as the Financial
District, Chinatown, theaters, upscale shopping, Embarcadero Center, Nob Hill,
and the Moscone Convention Center. Built in 1987 and renovated in 2004, the
property features 338 luxury rooms, 17,500 square feet of meeting space, a
state-of-the-art conference center and two food and beverage facilities. The
property is owned under a ground lease which has a term expiring in 2083.
Monty J. Bennett, President and CEO of Ashford Hospitality Trust, said,
"Throughout its storied history, San Francisco has been known for fabulous
luxury hotels and destinations. Our agreement with Marriott to re-brand this
hotel as JW Marriott opens a new and exciting chapter in the city's history as
San Francisco joins an exclusive group of fourteen other cities in the United
States that can boast of a JW Marriott hotel. With Marriott's proven
reservation system and honored guest program, as well as the luxury appeal of
the JW Marriott brand worldwide, we are confident this combination will help
us tap into the tremendous potential of this asset. The renovation and re-
branding to one of the world's preeminent luxury brands will position us to
outpace the dramatic turnaround we are expecting in the San Francisco hotel
market."
The award-winning JW Marriott Hotels & Resorts brand showcases dramatic,
stylish interiors that provide a distinctive sense of place. Design elements
throughout each property imbue the hotel with a sense of calm and
appropriateness to the setting. Service is unobtrusive and anticipatory. All
combine to help guests achieve their goals, whether they are professional
achievement or personal well-being. Currently, there are 36 JW Marriott hotels
in 18 countries.
Ashford Hospitality Trust is a self-administered real estate investment
trust focused on investing in the hospitality industry across all segments and
at all levels of the capital structure, including direct hotel investments,
first mortgages, mezzanine loans and sale-leaseback transactions. Additional
information can be found on the Company's web site at www.ahtreit.com.
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 forward-looking statements include,
but are not limited to, the forward EBITDA multiple, the forward income
capitalization rate, the forward EBITDA yield, the expectation that the re-
branding and renovation will be completed by December 2007, the impact of the
transaction on our business and future financial condition, our business and
investment strategy, our understanding of our competition and current market
trends and opportunities and projected capital expenditures. Such statements
are subject to numerous assumptions and uncertainties, many of which are
outside Ashford'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: 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's filings with the Securities and Exchange
Commission. EBITDA is defined as net income before interest, taxes,
depreciation and amortization. EBITDA yield is defined as trailing twelve
month EBITDA divided by the purchase price. 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 funds from operations
minus a capital expense reserve of 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 or 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.
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.
Contact: Douglas Kessler
Chief Operating Officer and Head of Acquisitions
(972) 490-9600
Tripp Sullivan
Corporate Communications, Inc.
(615) 254-3376
SOURCE Ashford Hospitality Trust, Inc.
-0- 04/19/2006
/CONTACT: Douglas Kessler, Chief Operating Officer and Head of
Acquisitions of Ashford Hospitality Trust, Inc., +1-972-490-9600; or Tripp
Sullivan of Corporate Communications, Inc., +1-615-254-3376/
/Web site: http://www.ahtreit.com/
(AHT)
CO: Ashford Hospitality Trust, Inc.; Oxford Lodging Advisory & Investment
Group, LLC; Whitehall Street Global Real Estate Limited Partnership; Pan
Pacific San Francisco Hotel; JW Marriott
ST: Texas, California
IN: RLT FIN TRA LEI
SU: RLE TNM
JK-JE
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2310 04/19/200616:48 EDThttp://www.prnewswire.com