Braemar Hotels & Resorts, a REIT with a 3,400-unit luxury hotel portfolio across the U.S. and its nearby islands, is initiating a sale of the company.

After the company evaluated other options, Braemar's board of directors determined it was in the best interest of the company and its shareholders to sell the company. The sale process will begin immediately and includes a portfolio of nine resort and five urban properties, the company said in a press release Tuesday.

"It is not believed that a luxury RevPAR lodging REIT like Braemar can flourish in today's market environment due to the historically low EBITDA multiple lodging REITs are achieving as well as the ongoing activism the Company has received," the company said in the release.

Last year, Braemar battled against a board challenge from activist investor Blackwells Capital. Braemar rejected the nomination of four people to its eight-person board of directors by Blackwells.

Braemar's portfolio has year-to-date revenue per available room growth of 2.9% through the second quarter, while the overall U.S. hotel industry achieved RevPAR growth of 0.8% in the same period, according to STR.

The company has properties in California, Florida, Philadelphia, Chicago and Washington, D.C., among other locales.

Rebeca Odino-Johnson, chairperson of the special committee steering the company's sale process, said the committee explored multiple alternatives, including a potential internalization of management, but settled on a sale as the best path forward.

"Given the sustained disconnect between our share price and our iconic portfolio's intrinsic real estate value, the Board believes pursuing a sale process is the right step at this time," Odino-Johnson said in the release.

Braemar agreed to a $480M termination fee for its advisory agreement with Ashford Inc. Ashford already received $17M of the sale fee after reaching the agreement, which will be credited against the sale fee if Braemar is sold prior to July 1, 2028.

The company's buyer will also need to assume agreements with two Ashford subsidiaries, Premier Project Management and Remington Lodging & Hospitality. Those agreements carry a $25M cancellation fee.