Dive Brief:
- Ashford Hospitality Trust signed a definitive agreement to sell the 315-room Courtyard Boston Downtown for $123 million to an undisclosed buyer, the real estate investment trust announced Wednesday.
- The sale, valued at $390,500 per key, is expected to be completed next month. The hotel deal is one of several the REIT has underway in the Boston market, as it offloads properties to pay off strategic financing.
- The Boston transaction comes as hotel investment, particularly in urban markets, is slated to ramp up amid a cooling interest rate environment.
Dive Insight:
The Courtyard Boston Downtown sale will result in significant capital expenditure savings for Ashford, according to CEO Stephen Zsigray, who was appointed to the role in April. Ashford has been offloading properties throughout 2024 to pay off outstanding debt.
As of the third quarter, the outstanding loan balance on the strategic financing was approximately $82 million, down almost 60% from the original balance, Zsigray said in an earnings report.
“I’m very pleased with the progress we have made related to our plan announced earlier this year to pay off our strategic financing. Since that announcement, we have sold over $310 million of hotels,” Zsigray said. In April, the company sold the 390-key Hilton Boston Back Bay hotel for $171 million to Certares and Belcourt Capital Partners.
As for the remaining balance, Zsigray said there is a “viable path to pay off this financing before the end of the year.” In addition to the Courtyard, Ashford has “several assets in the market at various stages of the sales process” and is “encouraged by the improved sentiment we are seeing in the transaction market.”
Hotel investment is expected to ramp up for the remainder of the year and into 2025, bolstered by additional anticipated rate cuts, hospitality professions shared at this year’s Lodging Conference.
Impending “stress points and robust fundamentals” will catalyze hotel transactions, particularly in urban markets, JLL forecasted last month. In Q3, global hotel transaction volume reached $42.1 billion, JLL reported.
