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Ashford Hospitality Trust has signed a definitive agreement to sell Hilton Boston Back Bay for $171 million, achieving a major milestone in its strategic financing repayment plan. The sale is part of the company’s broader strategy to deleverage and reposition for growth and shows strong progress in the liquidation of assets. The transaction, expected to close next month, is consistent with Ashford’s commitment to financial stability and enhanced shareholder value.
Strategic asset liquidation
The sale of the 390-room Hilton Boston Back Bay represents a capitalization rate of 7.3% of 2023 net operating income, with expected net proceeds of approximately $70 million. This significant development in Ashford’s asset sales strategy highlights the company’s commitment to reducing strategic financing burdens. In addition to the sale of the Boston Hilton, Ashford has identified more than a dozen assets for possible sale and has entered into six agreements, demonstrating a proactive approach to asset management and financial optimization.
Financial Results and Outlook
Ashford Hotel Trust reported a net loss attributable to common shareholders of $31.3 million in the fourth quarter and a full-year loss of $193.7 million. Despite these challenges, the company’s strategic asset sales and refinancing efforts provide a path to improved financial position and operating efficiency. Ashford’s aggressive strategy of repaying strategic financing through asset sales, mortgage refinancing and non-traded preferred equity financing is expected to position the company for sustainable growth and eventual return to its ordinary dividend.
Business Highlights and Future Plans
Despite facing financial headwinds, Ashford Hospitality Trust reported continued improvement in operating conditions, with RevPAR increasing 1.6% in the fourth quarter compared with the same period last year. These operational successes, coupled with strategic financial strategies, are an integral part of Ashford’s recovery and growth strategy. Looking ahead, the company remains focused on executing on its multi-faceted plan to reduce debt and leverage its diverse, high-quality hotel portfolio to drive revenue growth and enhance shareholder value.
The sale of Hilton Boston Back Bay and the ongoing repayment of strategic financing underscore Ashford Hospitality Trust’s commitment to financial stability and growth. As the company continues to address future challenges and opportunities, its strategic decisions and operational improvements are expected to lay the foundation for long-term success and shareholder value creation.
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