Ashford Hospitality Trust has signed a definitive agreement to sell the 150-room Residence Inn San Diego Sorrento Mesa located in San Diego for $42 million or $280,000 per key. The sale is expected to be completed in October and is subject to normal closing conditions. Other terms and conditions were not disclosed.
When adjusted for the company's anticipated capital expenditures of $16 million, the sale price represents a 5.7 percent capitalization rate on net operating income or a multiple of 15.3 times Hotel EBITDA for the twelve months ended July 31. Excluding the anticipated capital spend, the combined sale price represents a 7.9 percent capitalization rate on net operating income or a multiple of 11.1 times hotel EBITDA for the twelve months ended July 31.
"The planned sale of the Residence Inn San Diego Sorrento Mesa reflects our ongoing strategy to opportunistically deleverage the portfolio while creating value for our shareholders," President and CEO Stephen Zsigray said in a statement. "This transaction provides us with increased financial flexibility moving forward."