Ashford Hospitality Trust, Inc. has acquired Hilton Santa Cruz/Scotts Valley in Santa Cruz, California for $50 million.
To fund the acquisition the company used cash on its balance sheet and issued as consideration to the seller approximately 1.5 million Operating Partnership Units valued at $7.00 per unit, a premium of approximately 31% to yesterday’s closing price.
The Company also assumed a non-recourse mortgage loan at closing with a current balance of approximately $25.3 million. The loan matures in March 2025 and has a fixed interest rate of 4.7%.
The 178-room hotel is located in Santa Cruz, California and the Property is the only full-service, Hilton-branded asset in the Santa Cruz market.
“We are excited to complete the acquisition of another high-quality, well-positioned asset that we believe will benefit from the very strong and growing Silicon Valley/Bay Area economy,” said Douglas A. Kessler, Ashford Trust’s President and Chief Executive Officer.
“Additionally, we are able to once again benefit from the competitive advantages provided by our Enhanced Return Funding Program, which we expect to significantly increase the returns for our shareholders. We are pleased with the meaningful progress of our utilization of the ERFP program to acquire these attractive assets, which should add value to our portfolio.”