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Ashford Hospitality Picks Up New Mexico Asset

SANTA FE, NM-The Dallas-based hotel REIT buys the 157-room Hilton Santa Fe for $18.2 million. The price translates to a cap rate in the 6% range based on the previous 12 months, but Ashford believes it can raise that to nearly 9% during its first year of ownership.

By Brian K. Miller | Updated on March 23, 2005

SANTA FE, NM-Ashford Hospitality Trust added to its portfolio this week with the 157-room Hilton Santa Fe. The Dallas-based REIT paid $18.2 million for the property, which recently saw $1.2 million in upgrades and will see another $2.5 million in coming months.Built in 1971, the hotel is located in historic Downtown Santa Fe. It includes 6,400 sf of meeting space, three restaurants, a courtyard with poolside fireplace and hot tub, fitness center and wireless Internet access. The recent upgrades included new bedding packages, soft goods and case goods in all rooms as well as flat screen televisions. The property generated revenues of $7.7 million in 2004. The trailing 12-month net operating income represents a capitalization rate of 6.4%. Ashford, however, predicts a forward 12-month net operating income capitalization rate of 8.8%. Solid Rock Advisors, Inc. represented Ashford in the transaction. The name of the seller was not immediately available. Ashford intends to invest an additional $2.5 million in brand PIP requirements and other improvements in 2005. Remington Lodging & Hospitality, LP will assume management of the property. The acquisition increases Ashford’s direct hotel portfolio to 55 assets totaling 9,346 rooms. The company recently completed the acquisition of 21 hotels for $250 million.

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