Texas-based Ashford Hospitality Trust announced on July 7th that it is likely handing over the SpringHill Suites in Plymouth Meeting, and other hotels in its portfolio, to its lenders. The reason provided in a press release was to protect stockholder value and liquidity.
“This is a prudent economic decision that reflects a comprehensive capital management process by the Company, which explored and assessed multiple options for these assets including refinancing, extensions, and potential asset sales,” commented Rob Hays, president and chief executive officer of Ashford Trust. “The recent amendment to our corporate financing provides us with added flexibility regarding these loan pools. Proactively choosing not to extend three of these loan pools improves our balance sheet by lowering leverage and materially improves our future cash flows. The combination of the paydowns and the removal of the debt associated with the pools we are not extending will lower our debt by approximately $700 million, or more than 18%. With the KEYS loan pool extensions behind us, our next final maturity is our Morgan Stanley loan pool secured by 17 hotels, which matures in November, and we currently believe that loan should be able to be extended with no paydown required. While the hotel debt markets continue to be challenging, we believe we are well-positioned for our upcoming maturities, and
our portfolio continues to generate strong operating performance. From a capital structure and balance sheet perspective, we will continue to focus on paying off our corporate financing and raising capital through our non-traded preferred stock.”
The hotel has eight floors, 199 rooms, and features 2,149 square feet of event space. You can read the full press release here.