EXHIBIT 99.1
AHT Closes on First Mezzanine Loan
Page 1
December 1, 2003
(ASHFORD HOSPITALITY TRUST LOGO)
NEWS RELEASE
Contact: Douglas Kessler Tripp Sullivan
COO and Head of Acquisitions Corporate Communications, Inc.
(972) 490-9600 (615) 254-3376
ASHFORD HOSPITALITY TRUST CLOSES ON $10 MILLION
MEZZANINE LOAN
TRANSACTION HIGHLIGHTS:
o $10 Million Mezzanine Loan Secured by Interests in Hilton Times Square
o Joins Syndicate Led by Bear Stearns Commercial Mortgage
o Enhances Ashford's Presence as a Fast-Growing Source of Lodging Capital
DALLAS (December 1, 2003) Ashford Hospitality Trust, Inc. (NYSE: AHT) today
announced it has closed on the purchase of a $10 million junior mezzanine loan
to FC 42 Mezzanine, LLC, an affiliate of Forest City Ratner Companies, an
affiliate of Forest City Enterprises, Inc. (NYSE:FCE), on the Hilton Times
Square in New York City.
The loan is a LIBOR based loan with a floor meeting Ashford's targeted yields,
matures in August 2006, and provides for two one-year extension options, subject
to certain conditions. Payment terms under the mezz loan provide for interest
only until August 2004, with amortization thereafter based on a 25-year
schedule. An origination fee of 1% was received by Ashford. The mezz loan is
locked out on prepayment through August 13, 2004, and thereafter may be prepaid
subject to decreasing prepayment premiums until February 13, 2006, when no
prepayment premium is payable.
The $10 million junior mezzanine loan was acquired by Ashford from Bear Stearns
Commercial Mortgage, the originator of the first mortgage, senior mezzanine and
junior mezzanine loans. Financing on the Hilton Times Square includes a first
mortgage of approximately $42.9 million, a senior mezzanine loan of
approximately $26.1 million, and the $10 million junior mezzanine loan held by
Ashford. Based on trailing 12-month net cash flow from the property, the debt
service coverage ratio at closing is approximately 1.4x for the first mortgage,
senior mezzanine and the junior mezzanine loans.
Developed in 2000 by Forest City Ratner Companies, the 21-story, 444-room Hilton
Times Square is located between 41st and 42nd Streets and Seventh and Eighth
Avenues in New York City. The hotel is built entirely on air rights over the
existing retail centers along 42nd Street above Madame Tussaud's and the AMC 25,
which is one of the highest grossing theaters in the
AHT Closes on First Mezzanine Loan
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December 1, 2003
country. The registration desk, reception area, Restaurant Above and Pinnacle
Bar are located on the 21st floor sky lobby. The Hilton Times Square also
features over 6,000 square feet of meeting space and offers oversized guest
rooms with first-class amenities and spectacular panoramic views of Manhattan.
The Times Square market has recently experienced a surge of corporate interest,
becoming home to Lehman Bros., NASDAQ, Viacom, Morgan Stanley, Ernst & Young and
Reuters. The New York Times is building its new headquarters at the corner of
8th and 42nd. Times Square was the best performing hotel submarket in Manhattan
in 2002 and one of only two markets in New York that has posted RevPAR increases
since September 11, 2001. Hilton Hotels Corporation manages the hotel property.
Commenting on the announcement, Monty J. Bennett, President and CEO of Ashford
Hospitality Trust, stated, "Given the significance we have placed on mezzanine
loans as a key component of our diversified investment strategy, it was
important for us to start off on a strong note. The Hilton Times Square is a
tremendous asset with a strong brand and sponsorship as well as an attractive
location, good market and improving fundamentals. In addition to the opportunity
to further develop relationships with some of the most active hotel lenders in
the market today, this transaction presents very attractive risk-adjusted
returns. On an unleveraged basis, we will receive an initial yield of 11% on our
investment and an even greater yield on a leveraged basis.
"As demonstrated by the caliber of lenders we have joined on this transaction,
Ashford Hospitality is a great fit for lenders who for various reasons need to
fill the gap between limits placed on traditional first mortgage financing and
the growing need for capital among hotel owners and developers. We have received
a tremendous amount of interest in our mezz loan program from lenders and
borrowers alike. With the number of new mezz loan opportunities accelerating as
lodging industry fundamentals continue to improve, we look forward to deploying
our unique combination of hotel financing and operations expertise and strategic
relationships to generate additional transactions."
* * * * *
Ashford Hospitality Trust is a self-administered real estate investment trust
focused exclusively on investing in the hospitality industry across all segments
and at all levels of the capital structure, including direct hotel investments,
first mortgages, mezzanine loans and sale-leaseback transactions. Additional
information can be found on the Company's web site at www.ahtreit.com.
Certain statements and assumptions in this press release contain or are based
upon "forward-looking" information and are being made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risks and uncertainties. When we use
the words "will likely result," "may," "anticipate," "estimate," "should,"
"expect," "believe," "intend," or similar expressions, we intend to identify
forward-looking statements. Such forward-looking statements include, but are not
limited to, the impact of the transaction on our business and future financial
condition, our business and investment strategy; our understanding of our
competition and current market trends and opportunities and projected capital
expenditures. Such statements are subject to numerous assumptions and
uncertainties, many of which are outside Ashford's control.
AHT Closes on First Mezzanine Loan
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December 1, 2003
These forward-looking statements are subject to known and unknown risks and
uncertainties, which could cause actual results to differ materially from those
anticipated, including, without limitation: general volatility of the capital
markets and the market price of our common stock; changes in our business or
investment strategy; availability, terms and deployment of capital; availability
of qualified personnel; changes in our industry and the market in which we
operate, interest rates or the general economy; and the degree and nature of our
competition. These and other risk factors are more fully discussed in the
section entitled "Risk Factors" in Ashford's Registration Statement on Form
S-11, as amended (File Number 333-105277), and from time to time, in Ashford's
other filings with the Securities and Exchange Commission.
The forward-looking statements included in this press release are only made as
of the date of this press release. Investors should not place undue reliance on
these forward-looking statements. We are not obligated to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or circumstances, changes in expectations or otherwise.
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