KEY WEST, FL—Ashford Hospitality Prime, Inc. has completed the acquisition of the 142-room Pier House Resort and Spa here from Ashford Hospitality Trust, Inc. for $92.7 million.
In connection with the transaction, Ashford Hospitality Prime has assumed the existing $69-million property level debt financing that Ashford Trust closed in September 2013. The balance of the purchase price was funded with proceeds from the company’s January equity offering.
On a forward 12-month basis, the purchase price represents a cap rate of 7.7% on net operating income and an EBITDA multiple of 11.6x. In 2013, the Pier House Resort achieved RevPAR of $302.76, with 84.6% occupancy and an Average Daily Rate of $357.86.
The assumed $69-million property level debt financing has a two-year term and three, one-year extension options with no test requirements for the first two extensions. The loan provides for a floating interest rate of LIBOR + 4.90%, with no LIBOR Floor.
“The Pier House Resort acquisition showcases the deal flow benefits of our agreements with Ashford Trust regarding option hotels and right of first offer hotels that fit our investment guidelines,” stated Monty J. Bennett, Ashford Prime’s Chairman and CEO. “This transaction presented a great opportunity for us given the superb quality of this asset, its unique location in an attractive market such as Key West, and a recent $12 million dollar renovation completed at the property which should provide us additional revenue enhancement opportunities with minimal costs. We look forward to continuing the build out of Ashford Prime’s portfolio with high RevPAR hotels in gateway and resort markets similar to the Pier House.”