Ashford Acquires 30-Hotel Portfolio

Ashford Hospitality Trust announced it closed on the
acquisition of the previously announced 30-property, 4,328-room hotel
portfolio from CNL Hotels and Resorts for $465 million in cash. The purchase
price equates to a trailing 12-month net operating income capitalization rate
of approximately 8.5% on the entire 30-hotel portfolio.The portfolio consists of 13 Residence Inns by Marriott in nine states;
six Courtyards by Marriott in five states; seven TownePlace Suites by Marriott
in six states; and four SpringHill Suites by Marriott in three states. The
hotels in the portfolio have an average age of 8.9 years with a majority of
the hotels built between 1997 and 2000. For 2004, the portfolio’s occupancy
improved by 340 basis points to 75.1%, ADR increased 5.6% to $93.65, and
RevPAR increased 10.5% to $70.37. For the first quarter of 2005, RevPAR for
the portfolio increased 15.6% over the first quarter 2004. Marriott
International will continue to operate the hotels under an incentive
management agreement.
  For 2005 and 2006, the Company projects investing, including the normal
reserves, a total of approximately $34 million in capital expenditures
composed of approximately $18 million to be committed in 2005 and
approximately $16 million to be committed in 2006. The scope and completion
dates vary by property, but the majority of the work is concentrated in the
13 Residence Inns and the seven TownePlace Suites.
  The Company funded the transaction with a $370 million 10-year mortgage
loan from Merrill Lynch Mortgage Lending, Inc. at a fixed rate of 5.32%,
$64,700,997 in net proceeds from the issuance of 6,454,816 shares of Series
B-1 Preferred Stock to Security Capital Preferred Growth Incorporated and cash
on the balance sheet. This latest issuance of Series B cumulative convertible
preferred shares represents all remaining preferred shares committed to be
issued under the Convertible Preferred Stock Purchase Agreement dated
December 27, 2004, with Security Capital Preferred Growth Incorporated. The
preferred dividend is set at the greater of $0.14 per share per quarter or the
prevailing quarterly common stock dividend.
  In addition, Ashford has exercised its option to sell to Security Capital
2,070,000 shares of common stock for closing to occur on July 1, 2005. This
participation right coincides with the January 2005 equity raise.
  Ashford Hospitality Trust now owns 77 core hotels containing 12,679 rooms.
Seventy nine percent (79%) of the rooms are Marriott, Hilton, Starwood and
Hyatt branded. The Company’s total portfolio is 50% full service, and 50%
select service. Thirty-one percent (31%) of the portfolio is upper-upscale,
57% upscale, and 12% mid-scale. The Company’s direct hotel investments are
managed by seven different managers.
  Monty J. Bennett, President and CEO of Ashford Hospitality Trust, said,
“The timely closing of this transaction, combined with the continued strong
performance of the hotels in the portfolio and the attractive financing we
secured, has positioned us for strong growth in 2005 and beyond. Our recent
decision to increase our second quarter dividend was a direct result of the
favorable outlook at these hotels and their expected positive impact on our
operations. We are pleased with the diversification this acquisition brings to
our portfolio in terms of brand, segment, property managers and geography.”
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