Ashford Trust sells again, this time in Florida

DALLAS — Ashford Hospitality Trust, the Dallas-based REIT that is attempting to right-size its portfolio to grow its EBITDA and value to investors, has announced the sale of another hotel: the 160-key Embassy Suites by Hilton Palm Beach Gardens PGA Boulevard in Palm Beach Gardens, Florida.

The hotel was acquired by Joe Lubeck, the CEO of Tampa, Florida-based American Landmark Apartments, for $40 million, according to the Commercial Observer. The hotel, built in 1990 on a 3.2-acre site, features 8,500 sq. ft. of meeting space.

The announcement came as Ashford Trust said it has successfully closed on the sale of four hotels (three of which had been previously disclosed) and has entered into definitive agreements to sell an additional two hotels.

Ashford Trust President and CEO Stephen Zsigray said these six transactions are part of the REIT’s ongoing strategy to optimize its portfolio through strategic asset sales. He said the majority of proceeds will be used to pay down mortgage debt, and together, these sales are expected to result in more than $60 million in future capital expenditure savings.

“We continue to aggressively refine our hotel portfolio through strategic divestitures,” said Zsigray. “We remain focused on maximizing shareholder value, and these sales accomplish all three of our strategic objectives: improved cash flow after debt service, significantly reduced future capital expenditure obligations, and lower portfolio leverage.”

The transactions that were previously disclosed include:

• The 252-key Hilton Alexandria Old Town in Virginia, sold to Chicago-based Lodging Capital Partners for $58 million in an all-cash deal.
• The La Posada de Santa Fe Resort & Spa in New Mexico sold to New Mexico-based Abo Empire for $57.5 million.
• The Hilton St. Petersburg Bayfront in Florida sold to Delray Beach, Florida-based Kolter Group for $96 million.

The REIT said these transactions generated $252.5 million in gross proceeds, or $280,000 per key. When adjusted for the REIT’s anticipated capital expenditures of $57.6 million, the sale price represents a 6% capitalization rate on net operating income or a multiple of 14.5 times Hotel EBITDA for the 12 months ended December 31, 2025. Excluding the anticipated capital spend, the combined sale price represents a 7.4% capitalization rate on net operating income or a multiple of 11.8 times Hotel EBITDA.

Ashford Trust also announced two pending transactions in which the REIT has entered into definitive agreements with undisclosed buyers for the 168-key Lakeway Resort & Spa in Austin for $37.8 million and the 150-key Embassy Suites by Hilton Dallas Near the Galleria for $17 million.

Those two sales are expected to be completed by May and are subject to normal closing conditions. The REIT said that when adjusted for the company’s anticipated combined capital expenditures of $2.5 million, the sale price represents a 4.8% capitalization rate on net operating income or a multiple of 16.2 times Hotel EBITDA for the 12 months ended December 31, 2025. Excluding the anticipated capital spend, the combined sale price represents a 5% capitalization rate on net operating income or a multiple of 15.5 times Hotel EBITDA.

In February, during the REIT’s Q4 and year-end 2025 earnings call, he said the company is currently marketing and negotiating off-market transactions on 18 additional hotels (including these transactions). In December, Ashford Trust formed a special committee “to evaluate strategic alternatives to maximize shareholder value, including a potential transaction.”