Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Braemar Hotels & Resorts Inc. | chicagosofitelacquisition.htm |
EXHIBIT 99.1
NEWS RELEASE
Contact: | David Kimichik | Deric Eubanks | Elise Chittick | Scott Eckstein |
Chief Financial Officer | SVP – Finance | Investor Relations | Financial Relations Board | |
(972) 490-9600 | (972) 490-9600 | (972) 778-9487 | (212) 827-3766 | |
ASHFORD PRIME ANNOUNCES ACQUISITION OF
SOFITEL CHICAGO WATER TOWER
Acquisition Highlights:
• | Acquired at a trailing 12-month cap rate of 6.0% and trailing 12-month EBITDA multiple of 14.1x |
• | Purchase price equates to a forward 12-month cap rate of 6.8% and forward 12-month EBITDA multiple of 12.7x |
• | Minimal CapEx needs after receiving $6 million of capital expenditures over the last few years |
• | Chicago market forecasted by PKF to have 4th highest RevPAR growth CAGR in the country from 2013-2015 |
• | Purchase price equates to approximately 20% below replacement cost |
DALLAS, February 10, 2014 -- Ashford Hospitality Prime, Inc. (NYSE: AHP) (“Ashford Prime” or the “Company”) today announced that it has signed a definitive agreement to acquire the 415-room Sofitel Chicago Water Tower for a total consideration of $153 million in cash ($369,000 per key). The Company expects to close the acquisition in the next thirty days. Located in the desirable Gold Coast submarket of Chicago, Illinois, the 415-room, four-star hotel features over 10,000 square feet of meeting space. The property will continue to be managed by Sofitel (Accor SA). The Company intends to finance the property with approximately $80.0 million of non-recourse mortgage debt.
The purchase price of $153.0 million represents a trailing 12-month cap rate of 6.0% on net operating income and an EBITDA multiple of 14.1x. On a forward 12-month basis, the purchase price represents a cap rate of 6.8% on net operating income and an EBITDA multiple of 12.7x. In 2013,
the Sofitel Chicago Water Tower achieved RevPAR of $182, with 82% occupancy and an Average Daily Rate of $222.
“We are very excited to acquire the Sofitel Chicago Water Tower as this high RevPAR asset is representative of how we envision building out Ashford Prime’s portfolio. This property will increase Prime’s overall average RevPAR and further diversify our portfolio by market, brand and manager,” said Monty J. Bennett, Ashford Prime's Chairman and Chief Executive Officer. “Also, its prime location in a major U.S. gateway market fits perfectly with the investment strategy that Ashford Prime was specifically designed to capitalize on. We will look for similar characteristics in acquisition opportunities as we continue to expand the Ashford Prime portfolio.”
Chicago is a major U.S. gateway market for both corporate and leisure travelers. The Chicago lodging market has experienced a substantial recovery in the past three years driven by outsized corporate and leisure demand growth with little corresponding supply growth, and continued gains in RevPAR and Average Daily Rate (ADR) are anticipated with occupancy now above prior 2008 peak levels. The nation’s ongoing economic recovery continues to support increased business and leisure travel and Chicago is considered one of America’s most dynamic cities, renowned for its iconic architecture, museums and a blend of urban sophistication and mid-western warmth.
The Sofitel Chicago Water Tower has 415 rooms, including 32 suites and one presidential suite, all featuring Sofitel's luxurious feathertop and duvet sleep system - SoBed. The hotel has more than 10,000 square feet of meeting space including a 4,592-square-foot ballroom, eight meeting rooms and a private dining room with open kitchen. Additionally, the hotel is home to one of Chicago’s
finest restaurants - Café des Architectes. Boasting classic French roots, Café des Architectes serves contemporary cuisine created with local ingredients, and offers outdoor terrace dining.
The Sofitel Chicago Water Tower provides upscale accommodations just minutes from the exclusive shopping of the Magnificent Mile, an array of downtown Chicago’s world-famous galleries, museums, fashionable boutiques and the many restaurants of Rush Street. This luxurious, downtown Chicago hotel is an architectural icon, designed by French architect Jean-Paul Viguier with a unique knifelike edge on the southern end which extends 33 feet over the sidewalk. The hotel is a 32-floor prism of glass featuring stunning views of Lake Michigan and the Chicago skyline. Its spectacular design has garnered the honor of being on the American Institute of Architects list of America's Favorite Architecture.
Ashford Hospitality Prime is a real estate investment trust (REIT) focused on investing in high RevPAR full-service and urban select-service hotels and resorts located predominantly in domestic and international gateway markets.
Follow Chairman and CEO Monty Bennett on Twitter at www.twitter.com/MBennettAshford or @MBennettAshford.
Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the terms and size of the offering and the use of proceeds from the offering. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford Prime's control.
These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: general volatility of the capital markets and the market price
of our common stock; changes in our business or investment strategy; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the market in which we operate, interest rates or the general economy; the degree and nature of our competition; the timing or completion of the offering; completion of the offering on the terms described in the registration statement and the accompanying prospectus relating to the offering; and use of proceeds from the sale of common shares in the offering. These and other risk factors are more fully discussed in Ashford Prime's filings with the Securities and Exchange Commission.
The forward-looking statements included in this press release are only made as of the date of this press release. Investors should not place undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise.
-END-