Ashford Completes Acquisition Of 21 Property Portfolio

DALLAS— Ashford Hospitality Trust, Inc. has completed the acquisition of the 21-property, 4,094-room hotel portfolio from entities controlled by affiliates of the Fisher Brothers, the Gordon Getty Trust, and George Soros collectively as majority partners, and certain members of Ashfords senior management team as minority partners for total consideration of $250 million. The purchase price is comprised of $35.0 million in cash, the issuance of $50.3 million in operating partnership units, and the assumption of $164.7 million in debt. The purchase price equates to an 8.8x trailing 12-month EBITDA multiple, an EBITDA yield of 11.4% and a trailing 12-month net operating income capitalization rate of 9.5% on the entire 21-hotel portfolio based on a trailing 12-month NOI of $23.7 million. The average cost of the assumed debt will be 7.1% following the repayment of approximately a $14.7 million mezzanine loan. The operating partnership units were priced at $10.07 using the 20-day average closing price calculated 5 business days prior to the signing of the definitive agreement in December 2004. Ashford management, comprising approximately 22% of the selling entity, structured approximately 100% of their net consideration in the form of operating partnership units. The Fisher, Getty, and Soros entities, comprising approximately 78% of the ownership interests in the selling entity, structured approximately 50% of their consideration in cash and 50% in operating partnership units. The core portfolio consists of 13 hotels across 5 brands and one independent comprising 3,099 total rooms: Houston Embassy Suites Galleria in Houston, TX; Houston Hilton NASA/Clearlake in Houston, TX; Fort Worth Radisson in Fort Worth, TX; St. Petersburg Hilton in St. Petersburg, FL; West Palm Beach Embassy Suites and Admiralty Office Building in West Palm Beach, FL; Key West Crowne Plaza LaConcha in Key West, FL; Sheraton Minneapolis West in Minnetonka, MN; Beverly Hills Crowne Plaza in Los Angeles, CA; Rockland Radisson Hotel Boston/South Shore in Rockland, MA; Milford Radisson in Milford, MA; Indianapolis Airport Radisson Hotel in Indianapolis, IN; Indianapolis Radisson Hotel City Centre in Indianapolis, IN; and the Historic Inns in Annapolis, MD. Remington Lodging & Hospitality, an affiliate of the current manager of the properties, will operate the hotels. Ashford intends to spend approximately $30 million for capital improvements to the core properties. The scope and completion dates vary by property, but should largely be completed by the first quarter of 2006. The non-core hotels include: Coral Gables Holiday Inn in Coral Gables, FL; Yarmouth Gull Wing Suites in South Yarmouth, MA; Hyannis Ramada Inn Regency in Hyannis, MA; Falmouth Inn on the Square in Falmouth, MA; Best Western in Dallas, TX; Ramada Inn in Warner Robbins, GA; Commack Howard Johnson in Commack, NY; and Westbury Howard Johnson in Jericho, NY. Ashford is currently evaluating various alternatives for the non-core hotels.