US-based Ashford Hospitality Trust has signed an agreement with Prudential Real Estate Investors (PREI) to acquire the remaining 28.26% ownership interest in the Highland Hospitality portfolio, in a deal that could be valued at $1.7bn.

Ashford currently owns 71.74% ownership interest in the 28-hotel Highland Hospitality portfolio.

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Ashford Hospitality Trust chairman and CEO Monty Bennett said: "With the strong hotel fundamentals the industry is experiencing, we expect to benefit from further upside in this portfolio and believe this as a very attractive investment opportunity.

"The Highland Hospitality portfolio comprises 19 full-service hotels and nine select-service hotels."

"Throughout the life of this venture, PREI has been a valued partner, contributing extensively to the value creating initiatives implemented over the past few years. Looking ahead, we intend to continue to work to maximise our investment in the portfolio."

The Highland Hospitality portfolio comprises 19 full-service hotels and nine select-service hotels, covering major brands such as Hilton, Marriott, Hyatt and Starwood.

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Subject to customary closing conditions, the deal is expected to be complete in the first quarter of 2015.

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PREI managing director Soultana Reigle said: "The sale of our fund’s ownership interest in the Highland Hospitality portfolio represents an excellent outcome for our investors.

"We are extremely pleased with the value that PREI and Ashford Trust have been able to add to the portfolio throughout our joint venture ownership."

Ashford Hospitality Trust is a real estate investment trust (REIT) that invests in the hospitality industry across all segments, while PREI is the global real estate investment business of Prudential Financial.