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Le Pavillon, New Orleans, a Tribute Portfolio Hotel – Image Credit Marriott International
Ashford Hospitality Trust has signed agreements to sell three hotel properties, generating approximately $69.5 million in gross proceeds.
Ashford Hospitality Trust, Inc. has entered into definitive agreements to sell three hotel properties: Le Pavillon in New Orleans, Embassy Suites by Hilton Austin Arboretum, and Embassy Suites by Hilton Houston Near the Galleria. The sales are expected to generate approximately $69.5 million in gross proceeds collectively.
The sale of the 226-room Le Pavillon is priced at $42.5 million, equating to $188,000 per room. This transaction is anticipated to close in December 2025, subject to customary closing conditions. The sale price reflects a 2.6% capitalization rate based on net operating income and a 27.2x multiple of Hotel EBITDA for the twelve months ending September 30, 2025.
The agreement covering the Embassy Suites by Hilton Austin Arboretum and the Embassy Suites by Hilton Houston Near the Galleria, which together comprise 300 rooms, is valued at $27.0 million, or $90,000 per room. This sale is projected to close in January 2026, also contingent on standard closing conditions. Adjusting for anticipated capital expenditures of $14.5 million, the sale price represents a capitalization rate of 2.2% on net operating income or a multiple of 29.9 times Hotel EBITDA for the twelve months ending September 30, 2025. Without the anticipated capital expenditures, the combined sale price represents a 3.3% capitalization rate on net operating income or a multiple of 19.5 times Hotel EBITDA for the same period.
The company expects these transactions to improve annual cash flow by over $2 million and save $14.5 million in future capital expenditures. The majority of the proceeds from these sales will be used to retire mortgage debt, which is anticipated to enhance cash flow after debt service and eliminate significant future capital expenditure obligations.
The sales are part of Ashford Hospitality Trust’s strategic plan to deleverage its portfolio while improving liquidity and cash flow. The company notes that the cap rates achieved on these sales reflect the value within its portfolio. Completion of the sales is subject to standard closing conditions, and there is no assurance that the sales will be completed as planned.
