Dallas-based Ashford Hospitality Trust, Inc. announced last week that they had acquired the 226-room Le Pavillon Hotel for 62.5 million in cash ($277,000 per key, slightly above the listing price of $275,000/key).
The hotel at 833 Poydras St. features approximately 7,800 square feet of meeting space across nine rooms. Remington Lodging is now the property manager.
Financing for the acquisition came from a $43.75 million non-recourse loan and $4 million from Ashford.
The seller was Brothers Property Corp. of Coral Gables, Florida, a subsidiary of American Financial Group of Ohio. They had owned the hotel since 1989 which they purchased for $6.9 million.
According to Ashford, the purchase price after adjusting for the $4 million in key money, represents a trailing 12-month cap rate of 5.8% on net operating income and a trailing 14.8x EBITDA multiple. On a trailing 12-month basis, the hotel achieved RevPAR of $127.32, with occupancy of 74% and Average Daily Rate (ADR) of $171.59.
“The Le Pavillon hotel has an excellent location in downtown New Orleans, and with its proximity to the major demand generators in the market, is well-positioned to continue to capitalize on the strength of the New Orleans market. With Remington as the property manager, we see substantial upside to the operating performance of this property,” said Monty J. Bennett, Ashford Trust’s Chairman and Chief Executive Officer in a press release on Market Watch.
Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing opportunistically in the hospitality industry across all segments and at all levels of the capital structure primarily within the United States.