DALLAS A joint venture led by Ashford Hospitality Trust Inc. has taken ownership of the 28-hotel Highland Hospitality portfolio through a consensual foreclosure process for total compensation of US$1.277 billion.
With 8,082 guestrooms, the pricing equates to approximately US$158,000 per key. Ashford’s contribution includes US$150 million cash and US$786 million of assumed debt, giving the Dallas-based REIT a 72% interest in the joint venture with an unnamed institutional investor. The joint venture intends to invest approximately US$43 million in a capital improvement program to upgrade the hotels.
Remington will manage 17 of the hotels. Marriott International will manage six, while Hyatt Hotels Corp. and McKibbon Hotel Management will take on two each. The remaining property will be managed by Hilton Worldwide. Ashford will asset-manage the entire portfolio.
“We are pleased to complete this strategic and accretive transaction,” says Ashford CEO Monty Bennett. “Of all the hotel transactions we have seen completed, we believe it would be hard to match the many benefits of this investment. We believe there is a substantial opportunity to improve the hotels’ performance with an aggressive asset management strategy similar to what we have accomplished with our existing hotels.”
The joint venture worked out a consensual restructuring with Highland’s existing senior lenders. The existing senior lenders will provide US$530 million of first mortgage three-year financing with two one-year extension options on 25 of the hotels, and the joint venture assumed first mortgage financing of US$146 million on three of the hotels with approximately two years remaining until maturity. Additionally, lenders will provide US$419 million of mezzanine financing that will cover all 28 hotels.
Highland Hotels portfolio
The hotels acquired by the Ashford-led joint venture are:
- The Ritz-Carlton, Atlanta
- Hilton Tampa Westshore, Florida
- Hilton Parsippany, New Jersey
- Hilton Boston Back Bay
- Hyatt Regency Savannah, Georgia
- Hyatt Regency Windwatch, New York
- Portsmouth Renaissance, Virginia
- Sugar Land Marriott, Texas
- Plaza San Antonio Marriott
- DFW Airport Marriott, Texas
- Omaha Marriott, Nebraska
- Renaissance Palm Springs, California
- Nashville Renaissance, Tennessee
- The Churchill, Washington, D.C.
- The Melrose, Washington, D.C.
- Sheraton Annapolis, Maryland
- The Westin Princeton, New Jersey
- Hilton Garden Inn Austin, Texas
- Hilton Garden Inn BWI Airport, Maryland
- Hilton Garden Inn Virginia Beach, Virginia
- Crowne Plaza Ravinia, Georgia
- Courtyard by Marriott Boston Tremont
- Courtyard by Marriott Denver Airport
- Courtyard by Marriott Gaithersburg, Maryland
- Courtyard by Marriott Savannah, Georgia
- Residence Inn Tampa Downtown, Florida
- The Silversmith Hotel, Chicago
- Hampton Inn Parsippany, New Jersey