On Tuesday, Braemar Hotels & Resorts entered into a termination and release agreement with Ashford Inc. and its affiliates, marking its official separation from the company and transition to a self-managed real estate investment trust, according to a Nov. 10 filing with the U.S. Securities and Exchange Commission.
Braemar’s shift to self-management comes after a lengthy strategic review process and recommendation by a special committee that the move was “the best outcome for shareholders.” Following that recommendation, Braemar’s board of directors approved the transition, and the company took steps over the last several months to terminate its advisory agreement with Ashford, restructure its management team and reconstitute its board with new independent directors.
Braemar initiated its termination of the Ashford relationship by selling the Ritz-Carlton Sarasota in Florida as well as the Hotel Yountville and the Bardessono Hotel and Spa, both in Yountville, California, for a combined $437.5 million in July, per the filing. Proceeds from the sales were used to pay Ashford a company sale fee in accordance with an advisory agreement the companies entered into last summer.
Braemar subsequently sold the Pier House Resort & Spa in Florida for $190.5 million as well as the Four Seasons Resort Scottsdale at Troon North in Arizona for $372 million to fulfill its termination obligations, per the filing.
However, the transition didn’t come without challenges. In June, Braemar’s largest shareholder, Al Shams Investments Limited, rebuked the Ashford spinoff and tried to upend the transition. In September, the shareholder nominated its own slate of candidates for election to Braemar’s board, claiming the trust had “failed to adequately serve the interests of its shareholders and that the time has come to offer an alternative.”
In conjunction with its October sale of the Scottsdale Four Seasons, though, Braemar and Al Shams reached a cooperation and settlement agreement, with the shareholder assenting to withdraw its candidate nominations. The agreement ended the pair’s dispute and paved the way for Braemar’s official transition.
A new Braemar
In addition to terminating its advisory agreement with Ashford, Braemar has also ended its master hotel management and master project management agreements with Remington Lodging & Hospitality and Premier Project Management, per a Tuesday news release.
“This transition marks the start of a new chapter for Braemar as a self-managed REIT,” Richard Stockton, who remains a director as well as president and CEO of Braemar following the transition, said in the release. “Our management team is now employed directly by the Company, we have updated our governance framework, and we have put forward a slate of director nominees, seven of whom are independent, with deep REIT, audit, governance and public company experience.”
On Tuesday, Braemar’s six incumbent directors — including Chairman Monty Bennett, Mary Candace Evans, Matthew Rinaldi, Rebeca Odino-Johnson, Kellie Sirna and Eric Batis — submitted their resignations, and the board appointed seven new independent directors, per the filing.
The new board includes Craig Barbarosh, Kevin Covey, Stephen Haggerty, Daniel Hirsch, Kevin Luebbers, Gail Steinel and Stephen Theriot. Haggerty is expected to be appointed as the independent chair of the board, per the filing.
Meanwhile, Braemar’s new executive team includes Robert Haiman as chief legal officer and Justin Coe as CFO and chief accounting officer, the REIT announced.
Coe most recently served as principal financial officer, principal accounting officer and chief accounting officer at Ashford Hospitality Trust. He assumed the role of principal financial officer earlier this year after Ashford Inc. CFO and Treasurer Deric Eubanks retired. Coe resigned from his Ashford titles effective Nov. 10, after which Ashford appointed Remington Hospitality Chief Accounting Officer Randy Jones to replace him.
Braemar also previously said that Nathan Schupp would join the company’s new management team as senior vice president of corporate finance, Elizabeth Lloyd would come on as senior vice president and head of asset management and Adam Tegge would become senior vice president of investments.
Following the transition, Braemar’s portfolio includes five hotels in the luxury segment and two that sit in the upper upscale chain scale:
- The Ritz-Carlton Reserve Dorado Beach in Puerto Rico
- The Ritz-Carlton, St. Thomas in the U.S. Virgin Islands
- Capital Hilton in Washington, D.C.
- The Notary Hotel, Autograph Collection in Philadelphia
- Sofitel Chicago Magnificent Mile in Chicago
- The Ritz-Carlton, Lake Tahoe in California
- Cameo Beverly Hills, LXR Hotels & Resorts in California
Braemar has also entered into agreements with third-party management companies Stonebridge Companies and Avion Hospitality to manage the Sofitel Chicago Magnificent Mile and Cameo Beverly Hills, respectively, per the release.
“Looking ahead, we expect continued wealth creation at the top of the economy and limited new luxury supply in our markets through 2028 to support 2027,” Stockton said. “Forward booking pace remains strong, and major events like Super Bowl LXI in Los Angeles add further tailwinds.”
