Ashford's $27 million Texas disposition, a Miami supertall betting on the Delano name, and Marriott's 104-key Sydney play look like three unrelated headlines until you follow the capital structure underneath each one.
Ashford Hospitality Trust's $325 million mortgage default, suspended preferred dividends, and 95% floating-rate debt at a 7.7% blended rate tell a story that every hotel REIT investor should be stress-testing against their own portfolio right now.
Kolter Group is paying $96 million for a 333-room Hilton in downtown St. Petersburg, and the per-key math only makes sense if you stop thinking about it as a hotel transaction. This is a land play dressed in a room key, and it tells you something uncomfortable about where real estate value is heading in coastal Florida markets.
Kolter Group is buying the 333-key Hilton St. Petersburg Bayfront from Ashford Hospitality Trust. They're not buying a hotel. They're buying three acres of waterfront dirt with high-density zoning and a 54-year-old building standing in the way.
The Baird Hotel Stock Index posted its third straight monthly gain in February, up 5.9%. But brands and REITs are living in two different markets, and the gap is widening.
Three straight months of gains have everyone feeling good about hotel equities. The real number worth watching is the 200-basis-point gap between hotel REITs and the broader REIT index in February.
Stonebridge picked up the W Atlanta Downtown at a 56% discount through a deed-in-lieu of foreclosure, and now they're converting it to a JW Marriott just in time for the World Cup. This is either brilliant opportunistic repositioning or the most expensive bet on a single summer event since someone built a hotel next to an Olympic village.
When a REIT with $2.6 billion in floating-rate debt starts dumping hotels at a 3.9% trailing cap rate, that's not a strategy. That's a fire sale with a press release.
