Monty Bennett’s Ashford Hospitality Trust is likely to hand the keys back to lenders for 19 hotels across the nation.
The portfolio, which is part of a $982 million mortgage pool, includes properties in Las Vegas, Atlanta and the Dallas area, according to a news release, first reported by Bloomberg. The Dallas-based firm will save $255 million in required debt payments and $80 million in capital expenditures by returning the assets.
The hotels’ mortgages expired at the end of June, and the $335 million would have pushed the maturity dates back to 2025.
“At this time, it appears that the most likely outcome will be a consensual transfer of these hotels to the respective lenders,” thecompany said in a news release.
The hotels weren’t performing well enough to cover the debt, especially given their high interest rates of approximately 8.8 percent. Many lenders are now requiring borrowers to pay down part of the debt or help fund property expenses in exchange for extending a loan’s due date amid high interest rates and declining property values.
However, Ashford extended mortgages for 15 other hotels in the REIT’s portfolio by paying $129 million. This includes two hotels in the Dallas-Fort Worth region, three in California and one in Lakeway, just west of Austin.
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The combination of paydowns and give-backs will lower the company’s debt by approximately $700 million, or more than 18 percent, said Ashford Trust CEO Rob Hays.
The hotels that Ashford plans to return are in markets “that have experienced significant headwinds throughout their post-pandemic recoveries, and a number of these markets are not forecasted to reach pre-pandemic topline levels until 2025 or 2026,” the statement said.
—Quinn Donoghue