Ashford Hospitality’s $410M Debt Sent to Special Servicing

UPDATED 9/18/24 5pm

Monty Bennett’s Ashford Hospitality Trust was dealt another distress blow.

As the troubled firm tries to root out distress in its portfolio, a $410 million loan backed by 17 hotels was again transferred to special servicing, this time for “imminent monetary default,” according to Morningstar Credit.

The loan, which was originated by Morgan Stanley Capital, was first sent to special servicing in April 2020. After being modified in February 2021, it was due to mature last November. Ashford used its final 12-month extension; the loan is now due this November.

Ashford is working with the special servicer on an extension and “does not currently intend to default on the loan,” it said in a statement.

As for the performance of the assets, net cash flow missed the underwritten figure by 14 percent last year. But occupancy rose from 67 percent in 2022 to 71 percent, Morningstar said.

Ashford’s latest distress wound comes on the heels of a blistering proxy battle that threatened to remove Bennett from the boards of Ashford Hospitality Trust and another of his real estate firms, Braemar Hotels and Resorts.

Activist investor Blackwells Capital claimed shares of both firms plummeted due to a “self-dealing external advisory agreement that makes Montgomery Bennett rich at the expense of stockholders.”

The battle ended in a truce, but not before both sides traded heated attacks online.

During the conflict, Bennett also got smacked with a lawsuit accusing him of using his media outlet, the Dallas Express, to influence shareholders.

Meanwhile, Ashford is desperate to make a dent in its mountain of debt.

Last summer, the firm announced plans to forego $335 in debt payments and capital expenditures and return 19 hotels to lenders.

Ashford’s lenders requested a court-appointed receiver for seven distressed hotels a few months later. Two of those properties were scheduled for foreclosure in April, just a day after Ashford Inc., advisor to Ashford Hospitality Trust and Braemar Hotels and Resorts, announced plans to delist its stock to save money.

This story was updated to include a statement from Ashford Hospitality Trust.