Ashford takes Durham Marriott
Ashford Hospitality Trust has signed a deal to acquire the Marriott at Research Triangle Park in Durham, NC, from Host Marriott Corporation for $28 million.The purchase price, on a pro-forma basis excluding incentive management
fees that would not be payable by Ashford and using a 5% FF&E reserve, equates
to a 10.0x trailing twelve-month EBITDA multiple, an EBITDA yield of 10.0% and
a trailing twelve-month net operating income capitalization rate of 8.2%. The
property generated revenues of $9.8 million on a trailing twelve month basis.
The acquisition is expected to close in February 2006.
Opened in 1988, the Marriott at Research Triangle Park has 225 rooms,
4,252 square feet of meeting space and two food and beverage facilities. The
hotel has land available for an expansion opportunity to the function space.
The hotel also benefits from its close proximity to Research Triangle Park, a
7,000-acre office park limited to organizations in research, development and
scientifically-oriented production. The park is closely tied to the three
major research universities of the University of North Carolina at Chapel
Hill, Duke University in Durham and North Carolina State University in
Raleigh. Research Triangle Park has over 100 research and development
organizations employing over 38,000 people.
The Marriott at Research Triangle Park completed a $2.5 million renovation
in 2002 of the guestrooms and bathrooms, which included the replacement of
softgoods and casegoods. Ashford will invest an additional $5.7 million over a
two-year period to renovate the lobby, restaurant, function space, guest
corridors, guestrooms and bathrooms. Remington Lodging & Hospitality, L.P.
will assume management of the property.
Monty J. Bennett, President and CEO of Ashford Hospitality Trust, said,
“The Research Triangle Park has been an important component of economic growth
in the region for many years. With the strong Marriott brand and an excellent
location in close proximity to both the Park and the Raleigh-Durham Airport,
this asset is well positioned to capture more than its share of the RevPAR
growth this market enjoys. Our planned renovation will also enhance our
ability to continue to drive rate growth at the property, while an intense
focus on improving operating margins and exploring the opportunity to expand
the meeting space in the future should make the Marriott at Research Triangle
Park a very compelling investment for Ashford.”