Ashford Hospitality Prime Inc. recently revealed its Q2 numbers where the company talked about its refined strategy of investing in luxury hotels and resorts. The REIT has been exploring opportunities to either reposition its non-core hotels to better fit that strategy or to opportunistically sell them if conditions warrant.
And to that end, on June 20, 2017, the company revealed that it had entered into an agreement with Marriott to convert its Courtyard Philadelphia Downtown hotel to an Autograph Collection property. The agreement with Marriott calls for the Courtyard Philadelphia to be converted to an Autograph hotel by June 30, 2019 pursuant to a conversion Product Improvement Plan currently estimated to involve approximately $23 million of capital expenditures—including updates to the guestrooms, guest bathrooms, corridors, lobby, restaurant, and meeting space—which will create a distinctive theme and style for the property that is commensurate with the Autograph Collection product, the report says. Marriott will continue to manage the property after the conversion.
In other financial and operating news, the REIT reported that net loss attributable to common stockholders for the quarter was $2.6 million or $0.09 per diluted share and that comparable RevPAR for all hotels increased 0.4% to $223.24 during the second quarter. The REIT also reported that comparable RevPAR for all hotels not under renovation increased 2.7% to $235.54 during the second quarter and that comparable Hotel EBITDA Margin for all hotels not under renovation increased 109 basis points for the quarter.
Adjusted funds from operations was $0.50 per diluted share for the quarter as compared with $0.60 per diluted share from the prior-year quarter. Adjusted EBITDA was $30.8 million for the quarter
During the quarter, the company completed the acquisition of the 80-room Hotel Yountville in Yountville, CA for $96.5 million. Concurrent with the completion of the acquisition, the company financed the hotel with a $51-million non-recourse mortgage loan.
Also during the quarter, the company entered into an agreement with Marriott to convert its Courtyard Philadelphia Downtown hotel to an Autograph Collection property. The REIT also reached an agreement with the City of San Diego for an extension of the ground lease at the Hilton La Jolla Torrey Pines hotel, as The REIT Wire, recently reported. The lease, which was scheduled to expire in 2043, was extended by 24 years and will now expire in 2067. Additionally, the company has options to further extend the ground lease by either 10 or 20 additional years depending on the amount of capital expenditures invested in the hotel during the term.