The acquisition follows Ashford's November 2003 purchase of the 119-room, four-year-old Hilton Garden Inn and the 102-suite, three-year-old SpringHill Suites, both in Jacksonville. That acquisition was part of a four-hotel portfolio the REIT purchased from Noble Investment Group of Atlanta for $33.9 million, or about $86,132 per room, as GlobeSt.com previously reported.
In acquiring the 32-year-old, 193-room oceanfront Sea Turtle Inn, Ashford gains entry to one of the most desirable resort markets in the state and the only full-service hotel in the Atlantic Beach/Jacksonville Beach markets. The hotel is 14 miles east of Downtown Jacksonville and Interstate 95.
"We have focused our direct hotel investment strategy to date primarily on properties that were either under-managed, well below replacement cost or offered strategic diversification to our portfolio," says Ashford president and CEO Monty J. Bennett. "The Sea Turtle Inn exceeds our investment hurdles by offering a strong initial yield, the opportunity to increase cash flow through enhanced cost controls, and an enviable competitive position in Atlantic, Jacksonville and Neptune Beaches due to current development and environmental restrictions."
The purchase price includes about $4.9 million in cash; operating partnership units valued at about $2.5 million; and the assumption of $15.7 million in debt. Bennett says the deal equates to a 10.1 trailing 12-month EBITDA multiple. The assumed first mortgage carries an interest rate of 7.25% based on a 25-year amortization schedule and matures in December 2005.
Located on 3.3 acres of beachfront property, the Sea Turtle Inn includes about 8,500 sf of meeting space, an outdoor pool and banquet/restaurant facilities. Bennett says the 1972-built property was completely renovated recently with over $9 million of improvements. Remington Lodging & Hospitality LLC of Dallas will manage the resort.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
