Ashford Hospitality Trust (Ashford Trust) has sealed a $19.2m definitive deal to sell the 144-room Residence Inn in Salt Lake City, Utah, US to an undisclosed buyer.
The transaction is expected to be finalised in early March, subject to standard closing conditions.
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However, the company also cautioned that there is no guarantee that the sale will conclude as planned or at all.
The sale price, when adjusted for anticipated capital expenditures, indicates a 4.6% capitalisation rate based on the hotel’s projected 2023 net operating income, or 18.2 times the expected earnings before interest, taxes, depreciation and amortisation (EBITDA) of the hotel for 2023.
Without the anticipated capital spend, the sale price reflects a 6% capitalisation rate on the projected 2023 net operating income, equating to 14 times the expected 2023 hotel EBITDA.
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Ashford Trust president and CEO Rob Hays said: “We are pleased to announce the signed agreement to sell the Residence Inn Salt Lake City at a very attractive cap rate.
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By GlobalData“We continue to have several assets in the market at various stages of the sales process and look forward to providing more updates in the coming weeks.”
Ashford Trust plans to use all proceeds from the sale to cut its debt.
Last October, the company signed a new franchise agreement with Marriott International for the transformation of its Le Pavillon Hotel in New Orleans into a Tribute Portfolio property by the first quarter of this year.
This overhaul will encompass upgrades to the restaurant, 266 guest rooms, guest bathrooms, corridors, and the hotel lobby bar.
The hotel will be redesigned to appeal to contemporary tastes, with Remington Hospitality continuing as the property manager.
Furthermore, in August 2023, Ashford Trust unveiled its plans to convert the Crowne Plaza La Concha Hotel in Florida into a Marriott Autograph Collection property.
