DALLAS, TX— Ashford Hospitality Trust has closed on the purchase of a $25-million junior-mezzanine participation interest from the originator of the first-mortgage, senior-mezzanine and junior-mezzanine loans, with the junior-mezzanine loan secured by a 17-property, full-service hotel portfolio totaling 5,354 rooms. It was reported the investment will generate an initial unleveraged yield of 11.2%, and is said to increase the company’s mezzanine and loan-participation portfolio to $50 million. As such, the new loan is to mature in July 2005 and reportedly provides for three one-year extension options, subject to certain conditions. Payment terms under the mezz loan are based on a 25-year amortization schedule, and the loan is locked out on prepayment until July 2005, subject to certain release-price provisions. Ashford maintained the REIT acquired the $25-million junior-mezzanine loan at par. Based on trailing 12-month net cash flow from the properties, all of which are affiliated with major upscale brands, the debt-service coverage ratio at closing is claimed to be approximately 1.3x for the first-mortgage, senior-mezzanine and junior-mezzanine loans. Commenting on the announcement, Ashford President/CEO Monty Bennett stated: “ Since our IPO, we have completed $224 million of hotel acquisitions, $50 million of mezzanine and first-mortgage participations and announced an additional $50 million in acquisitions that are expected to close in the first quarter. This transaction brings [our]total investments completed or announced to date to $324 million.”
