Ashford Hospitality is betting on Downtown Atlanta's booming hotel market with its just-consummated W Atlanta buy.
Ashford Hospitality Trust detailed even more of its recent purchase of the W Atlanta Downtown hotel. As we previously reported here, the Dallas hotel REIT bought the 237-room hotel for $56.8M ($239k/key) from Square Mile Capital Management. Here are some key updates to the sale just released:
Starwood Hotels will continue to manage the hotel.
Ashford financed the purchase with a $40.5M interest-only loan with a 5.1% LIBOR interest rate for two years.
The 12-montth cap rate was 7.2% on in-place income.
Average occupancy was 73.8% with an average daily rate of $203.57/night.
This is one of the first times in recent memory any commercial real estate exec called Atlanta “booming,” as Ashford Trust chairman and CEO Monty Bennett did in a company release on the purchase.
Square Mile picked up the W Hotel in 2010, when it purchased a 40% stake in a hotel loan package assembled by the FDIC from the failed Silverton Bank. Square Mile's Nolan Hecht (here) says the firm managed to triple net operating income at the hotel during its hold. “Given the strength of the subsequent market upswing, it's clear that our timing couldn't have been better,” he says. “In this specific instance, the property’s on-site management and our corporate asset management team were especially confident that the W Hotel Atlanta Downtown could be positioned strategically as one of the city’s leading hotels.”
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