Ashford Hospitality Trust buys 51 hotels in a $2.4 billion deal

Ashford Hospitality Trust signed definitive agreements to acquire a portfolio of 51 hotels previously owned by CNL Hotels and Resorts in a $2.4 billion transaction. The portfolio of hotels became available due to a $6.6 billion deal announced Jan. 19 in which CNL Hotels agreed to be acquired by Morgan Stanley Real Estate.

Ashford will become one of the largest real estate investment trusts in the U.S. with completion of the transaction, pending certain approvals.

Morgan Stanley will retain eight CNL properties including three operating under Hilton's Waldorf-Astoria Collection brand: The Grand Wailea Resort Hotel & Spa in Maui, Hawaii; the La Quinta Resort & Club and PGA West in La Quinta, Calif.; and the Arizona Biltmore Resort & Spa in Phoenix. In addition, Morgan Stanley will acquire the Ritz-Carlton Orlando and JW Marriott Orlando at the Grande Lakes Resort; the Doral Golf Resort & Spa, a Marriott Resort in Miami; the JW Marriott Desert Ridge Resort & Spa in Phoenix; and the Claremont Resort & Spa in Berkeley, Calif.

The portfolio acquired by Ashford is comprised of 24 full-service, upper-upscale hotels -- totaling 7,953 rooms that operate under such brand names as Hilton, Embassy Suites, JW Marriott, Marriott, Doubletree, Renaissance and Hyatt -- and 27 premium select-service hotels -- such as Courtyard by Marriott, Residence Inn by Marriott, SpringHill Suites by Marriott, Fairfield Inn by Marriott, TownePlace Suites by Marriott and Hampton Inn totaling 5,571 rooms.

Ashford noted that the Marriott Seattle Waterfront; Hyatt Regency Montreal; Hilton El Conquistador in Tucson, Ariz.; Hilton Costa Mesa (Calif.); and Capital Hilton in Washington are among the hotels it acquired.

"This portfolio of well-located and strong-performing assets is one of the best hotel collections we've seen in the past decade, and we are extremely pleased to acquire it with a structure that is accretive to shareholders in the first year of ownership," said Monty Bennett, president and CEO of Ashford Hospitality Trust.

"The majority of these markets are experiencing sizable RevPAR (revenue per available room) gains, and we see this transaction as a continuation of our efforts to position Ashford's assets in the path of growth. This transaction gives us the opportunity to extend our proven investment and portfolio management strategies on a much larger platform."

In 2004, Ashford acquired a portfolio of 21 hotels from companies controlled by Fisher Brothers, the Gordon Getty Trust and George Soros.

To contact the reporter who wrote this article, send e-mail to Michael Milligan at [email protected].

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