Purchase price equates to an estimated forward 12-month cap rate of 8.6% and an estimated forward 12-month EBITDA multiple of 10.3x.
DALLAS – Ashford Hospitality Trust, Inc. announced that it has signed a definitive agreement to acquire the 232-room Memphis Marriott East hotel for total consideration of $43.5 million in cash ($187,500 per key). The acquisition is expected to close within the next 30 days. Upon closing, the property will be managed by Remington Lodging.
The purchase price of $43.5 million represents a trailing 12-month cap rate of 7.6% on net operating income and a trailing 11.6x EBITDA multiple. On a forward 12-month basis, the purchase price represents an estimated cap rate of 8.6% on net operating income and an estimated 10.3x forward EBITDA multiple.
“This transaction was particularly attractive given the hotel’s prime location and market attributes, which include no new competitive supply projected for the submarket and stable corporate demand generators,” said Monty J. Bennett, Ashford Trust’s Chairman and Chief Executive Officer. “Additionally, with the hotel’s recent conversion to a full service Marriott, it has virtually no capex needs. After the installation of our affiliated property manager, Remington Lodging, we expect to achieve continued solid increases in RevPAR penetration as the property stabilizes.”
Located in the heart of East Memphis, the Memphis Marriott East hotel is minutes away from upscale restaurants and shopping and is an ideal choice for guests visiting nearby attractions such as Elvis’ Graceland, Beale Street and Historic Downtown Memphis. The property has 232 well- equipped guestrooms and 6 meeting rooms with approximately 8,960 square feet of meeting space. Hotel amenities include an indoor pool and whirlpool, 24-hour fitness center, Table – A Delta Grill restaurant, and complimentary on-site parking.
Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing opportunistically in the hospitality industry across all segments and at all levels of the capital structure primarily within the United States.
Ashford has created an Ashford App for the hospitality REIT investor community. The Ashford App is available for free download at Apple’s App Store and the Google Play Store by searching “Ashford.
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