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Ashford, Hilton Rework Stakes in 11 Hotels

DALLAS-The REIT gets 100% ownership of nine hotels and Hilton takes two in divvying the CNL hotel portfolio. Ashford says the revision helps to clear the route for sales.

By Connie Gore | Updated on December 17, 2007

DALLAS-Ashford Hospitality Trust Inc. and Hilton Hotels Corp. have repackaged a joint venture partnership. The new agreement gives 100% ownership in nine hotels to Ashford and two to Hilton.

In a press release this morning, the Dallas-based Ashford says the team is projecting that the transaction will be earnings neutral to the company. The reworked agreement does not impact the 544-room Capital Hilton at 1001 16th St. NW in Washington, DC and 394-room Hilton La Jolla Torrey Pines at 10950 N. Torrey Pines Rd. in La Jolla, CA, which they hold under a 75-25% split with the local REIT as the majority owner. Ashford acquired the 13 hotels, with Hilton as the management company, in its $2.4-billion buyout of Orlando-based CNL Hotels & Resorts Inc. in April.

“With full control of the hotels, we will be able to more efficiently direct the operational, financing, capital expenditure and sale strategies,” Monty J. Bennett, Ashford’s president and CEO, says in the press release. In addition, he says the revised agreement “facilitates a reduction in our inherited overexposure to the Crystal City-Washington, DC market, where we have our highest concentration of hotel assets.” Shortly after the CNL buyout, Ashford was considering putting 10 hotels, totaling 3,553 keys, for resale.

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