Ashford To Acquire Sea Turtle Inn

ATLANTIC BEACH, FL— Dallas, TX-based Ashford Hospitality Trust has reportedly signed a definitive agreement to acquire the Sea Turtle Inn, a 193-room, independently operated, full-service beachfront resort here in the Greater Jacksonville area for total consideration of $23.1 million, with the acquisition expected to close this coming month. It was noted the purchase price is to include approximately $4.9 million in cash, operating partnership units valued at approximately $2.5 million, and the assumption of $15.7 million in debt, equating to a 10.1 trailing 12-month EBITDA multiple. The assumed first mortgage bears interest at a rate of 7.25%, based on a 25-year amortization schedule, and matures in December 2005. The operating partnership units are to be issued at par based upon the average closing price of the company’s common shares for the week preceding the third business day before closing. Transaction highlights reportedly include: the acquisition works out an 8.2 first-year EBITDA multiple; the asset is said to enjoy a strong reputation in a high barrier-to-entry market; the deal would be consistent with the REIT’s stated investment strategy to acquire select independents; and the undertaking would increase Ashford’s direct hotel portfolio to 17 properties comprising 2,784 rooms. Located on 3.3 acres of beachfront property, the Sea Turtle Inn includes approximately 8,500 square feet of meeting space, an outdoor pool, and banquet/restaurant facilities. Built in 1972, the property was recently completely renovated via more than $9 million in improvements. Remington Lodging & Hospitality LP has reportedly been tapped to manage the property. According to Ashford President/CEO Monty Bennett: “The Sea Turtle Inn exceeds our investment hurdles by offering a strong initial yield, the opportunity to increase cash flow through enhanced cost-controls, and an enviable competitive position in Atlantic, Jacksonville and Neptune Beaches due to current development and environmental restrictions.”