Ashford Trust Refinances 8-Hotel Portfolio

Secured by assets across several states, the previous mortgage loan had an outstanding balance of roughly $377 million and was due to mature in 2020.

Douglas Kessler, Ashford Hospitality Trust Inc.
Douglas Kessler, Ashford Hospitality Trust Inc.

For the third time in three months, Ashford Hospitality Trust Inc. has refinanced a mortgage loan. In the latest transaction, the Dallas-based REIT refinanced a mortgage loan that had an outstanding balance of approximately $377 million and was secured by eight hotels.

The original loan was part of the BAML 1 & 2 Pool loan with a maturity date of January 2020. The REIT said the new loan totals $395 million and should result in annual interest savings of about $6.5 million.

The new mortgage has a two-year initial term and five one-year extension options. The loan is interest-only and provides for a floating interest rate of LIBOR plus 3.0 percent. The loan is secured by the following hotels:

  • Embassy Suites, Portland
  • Embassy Suites Crystal City, Va.
  • Embassy Suites in Orlando, Fla.
  • Embassy Suites Santa Clara, Calif.
  • Crowne Plaza Key West, Fla.
  • Hilton Costa Mesa, Calif.
  • Sheraton Minneapolis
  • Historic Inns of Annapolis, Md.

Hilton Costa Mesa
Hilton Costa Mesa

“This refinancing is a continuation of our strategy to take advantage of the strength in the debt markets to address a future maturity and achieve substantial expected savings in annual interest payments,” Douglas Kessler, Ashford Trust’s president & CEO, said in a prepared statement. “With our three recent refinancings, we have now achieved expected annual interest savings of over $19 million. Going forward, we will continue to focus on looking for similar refinancing opportunities to create shareholder value.”

Other refinancing deals

In late October, Ashford Trust completed two separate refinancing. The first one was for Hilton Boston Back Bay, that had an outstanding balance of about $95 million and a final maturity date of January 2018. The new non-recourse loan for that property totaled $97 million with a five-year term and had a floating interest rate of LIBOR plus 2.0 percent. It was expected to result in annual interest and principal payments savings of approximately $2.8 million.

A day later, on Oct. 31, the company said it had refinanced a mortgage loan with an outstanding balance of about $413 million. That loan was part of the BAML 27 Pool loan with a final maturity date of December 2021. The new loan totaled $427 million and was expected to result in annual interest savings of about $9.8 million. It had a two-year initial term and five one-year extensions, was interest only and a floating interest rate of LIBOR plus 3.0 percent. That refinancing was secured by 17 hotels: four Courtyards, five Embassy Suites, one Hampton Inn, one Hilton Garden Inn, two Hiltons, three Residence Inns and one Sheraton.

Ashford Trust is a REIT that focuses on upper upscale, full-service hotels mainly with Marriott and Hilton brands. Its current portfolio encompasses about 120 properties and more than 25,000 rooms.