Ashford Trust Launches Key Money in NOLA
- Jun 17, 2015
Ashford Hospitality Trust Inc. has debuted its recently announced “key money” concept with the acquisition of a New Orleans luxury hotel. Ashford Trust purchased the 226-key Le Pavillon Hotel in New Orleans’ CBD for $62.5 million, $4 million of which will be provided by Ashford Inc. in key money consideration. Ashford will provide further acquisition financing through a $43.75 million non-recourse, interest-only mortgage loan. The loan provides for a floating interest rate of LIBOR+5.10 percent and has a two-year term with three one-year extensions. Ashford Trust expects to elevate the property’s trailing 12-month cap rate of 5.8 percent to a forward 12-month cap rate of 7.8 percent.
Ashford Trust picked up the luxury hotel from American Financial Group Inc. Le Pavillion was owned and managed through a subsidiary of Great American Insurance Co. The seller expects to recognize a non-core after-tax gain of about $25 million on the sale. Remington Lodging has taken over as property manager.
Built in 1907, Le Pavillion is within walking distance of the French Quarter, Mercedes Benz Superdome, the Smoothie King Arena and the Ernest N. Morial Convention Center. Amenities include 7,800 square feet of meeting space, a year-round heated rooftop pool and an onsite Cajun and creole restaurant.
Image credit: Le Pavillon Hotel via Facebook