Ashford to Sell Courtyard Boston Downtown to Deleverage Portfolio

Ashford Hospitality Trust, Inc. AHT has taken another step in its strategic plan to deleverage and optimize its portfolio. The Dallas, TX-based REIT announced a definitive agreement to sell the 315-room Courtyard Boston Downtown for $123 million ($390,500 per key). The transaction, expected to close in January 2025, represents an attractive exit for Ashford, yielding a capitalization rate of 5.9% and 14.3X Hotel EBITDA after adjustments for anticipated capital expenditures. Excluding capital expenditure adjustments, these metrics improve to a 6.9% cap rate and 12.3X EBITDA, underlining the asset's strong valuation in the current market.According to Ashford's President and CEO, Stephen Zsigray, the sale of this Boston property supports the company’s broader initiative to deleverage its balance sheet, specifically targeting the reduction of its BAML Highland Pool loan. The transaction eliminates significant future capital expenditures that would have been necessary to maintain the property’s competitive positioning.Ashford’s ongoing strategy is to address its strategic financing obligations, set to mature in January 2026. Over the past several months through Nov. 5, the company has successfully raised more than $310 million from the sale of hotels, completed a refinancing of Renaissance Nashville that generated surplus proceeds and expanded its capital base through non-traded preferred stock offerings.Apart from being focused on deleveraging, this REIT continues to refine its asset base, concentrating on high-quality, geographically diverse, upper-upscale, full-service hotels. The conversions of La Concha and Le Pavillon hotels are expected to enhance operational performance, bolstering portfolio value.Ashford: In a NutshellThis transaction reflects growing optimism in the hospitality real estate market. Zsigray highlighted an improvement in transaction market sentiment, indicating the potential for further strategic sales. With several other assets in the market, Ashford is well-positioned to capitalize on favorable market conditions while achieving its financial and operational objectives.As Ashford moves closer to addressing its strategic financing challenges and realizes gains from its repositioning efforts, it demonstrates a clear focus on creating value for shareholders. However, the successful execution of future asset sales and continued operational performance will remain critical as the company navigates its next phase of growth in 2025.Shares of this Zacks Rank #3 (Hold) company have risen 24.9% so far in the quarter, against the industry’s decline of 4.3%.Image Source: Zacks Investment ResearchStocks to ConsiderSome better-ranked stocks from the REIT sector are Welltower Inc. WELL and Cousins Properties CUZ, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Welltower’s 2024 FFO per share has been raised 1.7% over the past two months to $4.26.The Zacks Consensus Estimate for Cousins Properties’ current-year FFO per share has moved marginally north in the past month to $2.68.Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cousins Properties Incorporated (CUZ): Free Stock Analysis Report Ashford Hospitality Trust Inc (AHT): Free Stock Analysis Report Welltower Inc. (WELL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks