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Ashford Hospitality Trust Inc. (AHT), a major player in the hospitality industry, announced the sale of the Hilton Boston Back Bay hotel for $171 million, marking an important step toward meeting its strategic financing goals to repay. The move is part of a broader strategy to optimize the company’s asset portfolio and strengthen its financial position.
Strategic Sales and Financial Impact
The sale of the 390-room Hilton Boston Back Bay is not just a transaction, but a strategic move to enhance AHT’s liquidity and reduce debt. The company expects net proceeds of approximately $70 million and plans to use the funds primarily to pay for its strategic financing. The sale, which is expected to close in March and is subject to customary closing conditions, demonstrates AHT’s proactive approach to addressing the hotel industry’s complex financial issues.
Take advantage of market dynamics
AHT’s decision to sell Hilton Boston Back Bay at a capitalization rate of 7.3% of 2023 net operating income underscores the company’s ability to take advantage of favorable market conditions. By securing a sales price equivalent to 12.3 times hotel 2023 EBITDA, AHT has demonstrated its ability to identify and execute transactions consistent with its financial and operating objectives.
Future Outlook and Strategic Initiatives
Going forward, AHT’s comprehensive plan to address strategic financing concerns involves not only asset sales, but also refinancing mortgage debt and raising capital through a non-traded preferred stock issuance. With more than a dozen assets in various stages of the sales process and significant progress in refinancing efforts, AHT is poised to move toward a more stable and growth-oriented future. This strategic pivot is expected to lay the foundation for a return to the common dividend for the foreseeable future, signaling confidence in the company’s financial recovery and growth trajectory.
The sale of Hilton Boston Back Bay is a key achievement as Ashford Hospitality Trust continues to execute on its strategic plan. This transaction not only contributes to the company’s financial health, but also reflects AHT’s commitment to strategic foresight and financial responsibility. As the hospitality industry continues to evolve, AHT’s actions today are foundational steps toward a stronger, more resilient tomorrow.
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