Ashford Hospitality Trust signed definitive agreements to sell three assets to undisclosed buyers for about $69.5 million in aggregate gross proceeds, according to a Thursday press release.
The properties are Le Pavillon, New Orleans, a Tribute Portfolio Hotel in Louisiana and the Embassy Suites by Hilton Austin Arboretum and the Embassy Suites by Hilton Houston Near the Galleria in Texas, per the release.
According to Ashford, based on current mortgage interest rates, the Dallas-based REIT expects the sales to generate more than $2 million in annual cash flow improvement and $14.5 million in future capital expenditure savings.
“Strategic asset sales will continue to play an important part in our plan to deleverage Ashford Trust while also improving cash flow and liquidity,” Ashford President and CEO Stephen Zsigray said in the release. “We believe that the attractive cap rates achieved on these divestitures reflect the value within our portfolio.”
Zsigray added that the majority of the proceeds from the sales would be used to retire the company’s mortgage debt, as well as improve cash flow after debt service. In addition, he said the sales would eliminate some of Ashford’s sizable future capital expenditure obligations.
“This disciplined approach will better position the Company for sustained value creation,” said Zsigray, who took over as CEO last year.
In 2023, Ashford signed a franchise agreement with Marriott International to convert the 226-key Le Pavillon Hotel in New Orleans to a Tribute Portfolio property. That hotel is being sold for $42.5 million, or $188,000 per key, per Thursday’s release. The REIT said the sale is expected to close by the end of December.
Meanwhile, the sales agreement for Embassy Suites by Hilton Austin Arboretum and Embassy Suites by Hilton Houston Near the Galleria, totaling a combined 300 rooms, is for $27 million, or $90,000 per key, per the release. That sale is projected to close in January 2026.
In September, Ashford sold the 150-room Residence Inn San Diego Sorrento Mesa for $42 million, and in August, it sold the Residence Inn Evansville East in Evansville, Indiana, for $6 million. That month, Ashford also completed its $27 million sale of the Hilton Houston NASA Clear Lake in Texas.
Ashford focuses on investing in upper upscale, full-service hotels, per the release. The company’s portfolio includes more than 60 hotels such as The Churchill in Washington, D.C., La Concha in Key West, Florida, and the Ritz-Carlton Atlanta.
