Ashford Hospitality to Buy Santa Fe Boutique Resort
- Oct 11, 2018
Ashford Hospitality Trust Inc. plans to increase its holdings in Santa Fe, N.M., with the acquisition of the iconic boutique resort hotel La Posada de Santa Fe for $50 million or approximately $287,000 per key. The closing is expected by late October.
La Posada de Santa Fe, a member of Marriott’s Tribute Portfolio, has 157 keys, four food and beverage outlets, an award-winning spa and 7,800 square feet of indoor and outdoor meeting space located on 5 acres, three blocks from the city’s historic Santa Fe Plaza. The property is in excellent physical condition after having received more than $6 million in capital improvements in recent years.
Remington Lodging will manage the property, post-closing. The company also runs the Hilton Santa Fe, owned by Dallas-based Ashford Trust. The firm expects to realize synergies from the joint management of La Posada and the Hilton Santa Fe, including the clustering of revenue management resources, consolidating accounting functions and sharing of various sales and human resources positions.
The property had revenue per available room (RevPAR) of $155 for the 12 months ending Aug. 31 with 74 percent occupancy and an average daily rate (ADR) of $210. Those numbers are above the most recent averages reported for the U.S. hotel industry by STR. During the week of Sept. 23-29, the average occupancy was up 1.7 percent to 71.5 percent compared to the same week in 2017. ADR rose 7.3 percent year-over-year to $137.31 and RevPAR was up 9.1 percent from the previous year to $98.15, according to STR.
“The acquisition of La Posada provides us the opportunity to own another high-quality asset in this attractive market where we have been a long-time owner of the Hilton Santa Fe,” Douglas Kessler, Ashford Trust’s president & CEO, said in a prepared statement. “We believe that by installing Remington as manager of La Posada we should be able to recognize significant operational synergies given our existing hotel in the market that should benefit both properties.”
Two years ago, the resort and spa became part of Marriott’s Tribute Portfolio, a collection of independent hotels that foster a sense of community and embrace local art and culture. The hotel, the first Tribute Portfolio resort in the Southwest, was upgraded to meet the standards of the brand. La Posada features uniquely designed guest rooms, adobe-style architecture and a professionally curated gallery of American art with pieces for sale. It is also known for its 4,500-square-foot, full-service Spa Sage, fitness center, pool and dining options like the acclaimed Julia – Spirited Restaurant & Bar.
In the past year, Ashford Trust had been taking advantage of the attractive lending market and refinancing many of its properties. In April, the REIT refinanced 22 hotels in a new loan totaling $985 million that would allow it to save about $11 million annually in interest. The loan was secured by hotels in Boston, Denver, Washington, D.C., Chicago and Tampa, Fla., among numerous other locations. Overall in the second quarter, Ashford Trust reported it had refinanced 56 hotels for $2.3 billion.
The REIT, which focuses on upper upscale, full-service hotels mainly with Marriott and Hilton Brands, also acquired the 252-key Hilton Alexandria Old Town in Alexandria, Va., in late June for $111 million.