Ashford Hospitality Trust Generates $33 Million Through Strategic Asset Sales

Ashford Hospitality Trust has bolstered its financial position by completing the sale of two hotel properties, generating combined proceeds of $33 million. This move represents a continuation of the real estate investment trust’s ongoing strategy to reduce its debt load.

The transactions involved the divestment of the Hilton Houston NASA Clear Lake, which sold for $27 million, and the Residence Inn Evansville East, which fetched $6 million. However, the effective capitalization rate on the net operating income from these properties over the trailing twelve months is a modest 1.3% after accounting for planned capital investments. Even excluding these expenditures, the rate would have reached only 2.0%, indicating a relatively low sales multiple.

President Stephen Zsigray underscored the strategic rationale behind the disposals, stating the proceeds will be directed toward “de-levering, improving the covenants under our recently extended credit facility, and increasing cash flow after debt service.” The company has indicated that additional asset sales are anticipated in the near future.

Should investors sell immediately? Or is it worth buying Ashford Hospitality Trust?

These efforts are part of the broader “GRO AHT” operational initiative launched in December 2024. The program is designed to significantly enhance EBITDA through a three-pronged approach focusing on:
* Reduced corporate overhead
* Top-line revenue growth
* Improved operational efficiencies

Early signs suggest the strategy is beginning to yield results. For the second quarter, the trust reported slight improvements in both revenue and EBITDA, despite posting a net loss of $39.9 million for the period.

On the markets, Ashford Hospitality Trust’s shares present a mixed technical outlook. The stock was last quoted at $5.99, facing immediate resistance levels at $6.03 and $6.31, with support holding at $5.93. Market analysts maintain a cautious ‘Hold’ stance on the equity. In line with its focus on strengthening the balance sheet, the company does not anticipate reinstating dividend payments in 2025, choosing instead to allocate all available capital toward structural improvements.