Ashford Hospitality Trust Announces Plan to Spin-off High RevPAR Hotel Portfolio as "Ashford Hospitality Prime, Inc." and Hosts

    Ashford Hospitality Trust Announces Plan to Spin-off High RevPAR Hotel
   Portfolio as "Ashford Hospitality Prime, Inc." and Hosts Conference Call

PR Newswire

DALLAS, June 17, 2013

DALLAS, June 17, 2013 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE:
AHT) ("Ashford Trust" or the "Company") today announced that the Company's
Board of Directors approved a plan to spin-off an 80% ownership interest in an
8-hotel portfolio, totaling 3,146 rooms (2,912 owned rooms), to holders of
Ashford Trust common stock in the form of a taxable special distribution. The
distribution is expected to be comprised of common stock in Ashford
Hospitality Prime, Inc. ("Ashford Prime"), a newly formed company to which
Ashford Trust plans to transfer the portfolio interests. This distribution is
expected to be made on a pro rata basis to holders of Ashford Trust common
stock as of the distribution record date. The distribution is expected to
take place toward the end of the third quarter. Ashford Prime is expected to
qualify as a real estate investment trust ("REIT") for federal income tax
purposes, and intends to file an application to list its shares of common
stock on the New York Stock Exchange, under the symbol "AHP."

Conference Call:

Ashford Trust will conduct a conference call today at 5:00 p.m. ET to discuss
the transaction. The number to call for this interactive teleconference is
(480) 629-9818 or (866) 225-8754, and the conference ID is 4625803. A
seven-day replay of the conference call will be available by dialing (303)
590-3030 or (800) 406-7325 and entering the confirmation number, 4625803.

The Company will also provide an online simulcast and rebroadcast of its
conference call. The live broadcast of Ashford Trust's call will be available
online at the Company's website,,on June17,2013, beginning
at 5:00 p.m. ET. The online replay will follow shortly after the call and
continue for approximately one year.

Ashford Hospitality Prime:

Ashford Prime will have a focused strategy to invest primarily in high RevPAR
hotels located predominantly in domestic and international gateway markets.
The initial portfolio will consist of the Hilton La Jolla Torrey Pines,
Capital Hilton in Washington, D.C., Marriott Plano Legacy Town Center, Seattle
Marriott Waterfront, Courtyard San Francisco Downtown, Courtyard Seattle
Downtown, Courtyard Philadelphia Downtown, and Renaissance Tampa International
Plaza. Ashford Prime also plans to operate at a more conservative leverage
level than Ashford Trust. The high quality of the Ashford Prime portfolio, as
well as the focused investment strategy and lower leverage profile, have been
designed with the goal to make Ashford Prime attractive to a broad range of
investors and to distinguish itself from Ashford Trust. Ashford Prime will be
externally advised by Ashford Hospitality Advisors LLC ("Ashford Advisors"),
which will be a subsidiary of Ashford Trust, pursuant to an advisory
agreement. Ashford Trust's operating partnership will retain a 20% ownership
interest in Ashford Prime's operating partnership. For the year ended
December 31, 2012, the initial Ashford Prime hotels had RevPAR of $140, total
revenues of $221.2 million, and Hotel EBITDA of $73.0 million. As of March
31, 2013, the initial portfolio also had total debt of $628 million and no
debt maturities until 2017. The post-spin-off Ashford Trust portfolio will
look similar to how it looks today. Ashford Trust will have 115 hotels with a
2012 RevPAR of approximately $95, which is only $4 less than the portfolio
RevPAR pre-spin-off. Also, the leverage level for Ashford Trust is expected
to reduce slightly post-spin-off.

Ashford Trust's Chairman and Chief Executive Officer, Monty J. Bennett
commented, "We are constantly searching for ways to maximize stockholder
value. Over the past year, we have made a concerted effort to improve our
transparency and communications with the investor and analyst community
regarding our historical total stockholder return, our debt management
strategy, and asset performance by debt pool. After analyzing several
strategies to maximize stockholder value, the Board decided to pursue a
spin-off of Ashford Prime."

Rationale for the Transaction:

  oCreation of Two Focused Companies Creates Clarity: After the separation,
    Ashford Prime will focus primarily on luxury, upper-upscale, and upscale
    hotels anticipated to generate RevPAR at least twice the national average
    (approximately $130 and higher). Ashford Trust will continue to focus on
    all segments of the hospitality industry, with RevPAR criteria outside the
    Ashford Prime investment focus.
  oPotential for a Higher Aggregate Market Value for Stockholders: The
    separation will enable potential investors and the financial community to
    evaluate the performance of each company separately, which may result in a
    higher aggregate market value than the value of the existing combined
  oTailored Capital Structure More Efficient: Each company will have the
    flexibility to create a capital structure tailored to its strategic goals
    and consistent with its stockholders' interests. In addition, these
    tailored capital structures should facilitate each company's ability to
    grow through acquisitions and strategic alliances, possibly using units of
    the operating partnerships as currency. The spin-off should result in a
    lower cost of capital for Ashford Prime which should enable it to pursue
    and acquire accretive transactions.
  oConservative Capital Structure: Ashford Prime will emphasize a
    low-leverage capital structure over time, with a target net debt and
    preferred equity / EBITDA level of 5.0x or lower. This should allow it to
    capitalize on favorable acquisition and investment opportunities.

Monty J. Bennett continued, "We are excited to announce this spin-off
transaction of Ashford Prime and we look forward to the opportunities this
spin-off could provide. Meanwhile, the Ashford Trust portfolio continues to
offer stockholders the same opportunistic approach that we've implemented for
the past decade. Further, we believe Ashford Prime and Ashford Trust will
both be well positioned to grow through acquisitions and capitalize on the
attractive industry fundamentals we expect to experience for the next several

Ashford Prime will enter into option agreements with Ashford Trust to acquire
the Pier House Resort and the Crystal Gateway Marriott. Ashford Prime will
have the right to exercise the Crystal Gateway Marriott option, after a
6-month lock-out, for a period of twelve months, and the Pier House Resort
option for a period of 18 months after the date of the distribution. The
697-room Crystal Gateway Marriott is located in Crystal City, VA, just outside
Washington, D.C. The purchase price for the Crystal Gateway Marriott will be
determined based on fair market value at the time of acquisition determined by
an independent appraiser. If Ashford Prime exercises the option to acquire
the Crystal Gateway Marriott, the purchase price will be payable in the form
of operating partnership units. The Pier House Resort is a 142-room luxury
hotel located in Key West, FL that was recently acquired by Ashford Trust.
During the first six months of the option period, the purchase price for the
Pier House Resort will be Ashford Trust's actual acquisition price plus
closing costs of approximately $90.6 million plus any owner-funded capital
expenditures. If Ashford Prime exercises the option to acquire the Pier House
Resort, the purchase price will be payable in either cash or operating
partnership units of Ashford Prime's operating partnership, at Ashford Trust's
election. Ashford Trust will also enter into a right of first offer ("ROFO")
agreement with Ashford Prime regarding certain hotels currently owned by
Ashford Trust that satisfy the investment criteria of Ashford Prime. The
right of first offer will give Ashford Prime the first right to acquire each
of the ROFO hotels to the extent the board of directors of Ashford Trust
determines it is appropriate to market and sell the ROFO hotels, subject to
certain prior rights granted to the hotel managers and limitations on hotels
that are held in a joint venture. Consideration for the ROFO hotels could be
cash or operating partnership units.

Advisory Agreement:

Prior to the distribution of Ashford Prime common stock to Ashford Trust
stockholders, Ashford Prime will enter into an advisory agreement with Ashford
Advisors. This agreement will require Ashford Advisors to manage the
day-to-day operations of Ashford Prime in conformity with its investment
guidelines. The advisory agreement will have an initial term of five years
and will be automatically renewed, subject to certain conditions, for one-year
terms thereafter. Ashford Advisors will be entitled to a base management fee
of 0.70% of the total enterprise value of Ashford Prime, subject to a floor.
Ashford Advisors will also be entitled to an incentive fee based on Ashford
Prime's total annual stockholder return outperformance compared to its defined
peers. The advisory agreement has been structured to ensure close management
alignment with stockholders. The base management fee is based upon total
enterprise value rather than gross assets and the incentive fee is based on
total stockholder return outperformance of Ashford Prime compared to a defined
peer group. Additionally, insider ownership, directly or indirectly, together
with related parties of approximately 21% of Ashford Prime will be
significantly above the average lodging REIT insider ownership of 2% and
establishes a clear and close alignment of management's interest with
stockholders. Another example of the close management alignment with
stockholders is that Ashford Trust will own 20% of Ashford Prime's operating
partnership. A significant amount of the insider ownership and all of the
external advisor's ownership will be partnership units which will not have any
voting power on matters voted on by stockholders. Unlike many privately held
management advisors, Ashford Advisors will be a subsidiary of Ashford Trust, a
publicly traded, NYSE listed company. Upon completion of the Ashford Prime
spin-off, the initial stockholders in Ashford Prime will own an interest in
Ashford Advisors via their ownership of shares in Ashford Trust.

Corporate Governance Structure:

Ashford Prime will have a corporate governance structure that will provide
transparency to investors and promote the long-term interests of
stockholders. Some of the significant features of Ashford Prime's corporate
governance structure include:

  oExternal advisor owned by a publicly traded company.
  oBoard of directors elected annually, which is expected to have five of
    seven independent members, including an independent lead director.
  oFour of the independent directors, including the lead director, will have
    no prior affiliation with Ashford Trust.
  oCorporate governance policy requires that the board consist of at least
    two-thirds independent directors at all times when the chairman is not
  oCharter provision and corporate governance policy that address potential
  oOpt out of certain Maryland law antitakeover provisions.
  oNo stockholder rights plan unless stockholders approve or ratify the plan.
  oBase management fee calculated on market-based total enterprise value.
  oIncentive fee based upon total stockholder return outperformance compared
    to a peer group.
  oSignificant advisor and employee ownership, the majority of which will be
    partnership units which will not have any voting power on matters voted on
    by stockholders.

Financial Advisor:

BofA Merrill Lynch served as financial advisor to Ashford Trust in connection
with the spin-off.

Form 10 Registration Statement:

Ashford Prime has filed a registration statement on Form 10 with the
Securities and Exchange Commission ("SEC") with respect to the planned
spin-off. The special distribution is anticipated to be declared toward the
end of the third quarter of 2013; however, it remains subject to the SEC
reviewing and declaring effective Ashford Prime's registration statement, as
well as the satisfaction of a number of other conditions, including receipt of
third-party consents. We cannot be certain this distribution will proceed or
proceed in a manner as currently anticipated.

Ashford Hospitality Prime
($ in thousands)
                                              Total  Owned 2012    2012 Hotel
Hotel            Location        Ownership%  Rooms  Rooms
                                                           RevPAR  EBITDA^(1)
Hilton La Jolla  La Jolla, CA    75%          394    296   $    $   
Torrey Pines                                               126.19  8,898
The Capital      Washington,     75%          544    408   176.09  15,285
Hilton           D.C.
Marriott Plano
Legacy Town      Plano, TX       100%         404    404   107.91  8,392
Seattle Marriott Seattle, WA     100%         358    358   155.64  10,521
Courtyard San    San Francisco,
Francisco        CA              100%         405    405   176.66  10,135
Courtyard        Seattle, WA     100%         250    250   107.02  4,860
Seattle Downtown
Courtyard        Philadelphia,
Philadelphia     PA              100%         498    498   125.56  9,805
Tampa            Tampa, FL       100%         293    293   120.57  5,144
Total                                         3,146  2,912 $     $  73,040
Option Hotels:
Pier House       Key West, FL    100%         142    142   $   
Resort & Spa                                               275.50
Crystal Gateway  Arlington, VA   100%         697    697   136.97
ROFO Hotels:
Crowne Plaza     Beverly Hills,  100%         260    260   $   
Beverly Hills    CA                                        133.00
Embassy Suites   Arlington, VA   100%         267    267   156.81
Crystal City
Crowne Plaza Key Key West, FL    100%         160    160   177.08
Hyatt Coral      Coral Gables,   100%         242    242   133.98
Gables           FL
One Ocean        Jacksonville,   100%         193    193   108.41
Jacksonville     FL
Houston Embassy  Houston, TX     100%         150    150   134.86
Portland Embassy Portland, OR    100%         276    276   131.83
Ritz-Carlton     Atlanta, GA     72%          444    319   123.60
Hilton Boston    Boston, MA      72%          390    280   184.47
Back Bay*
Courtyard Boston Boston, MA      72%          315    226   133.64
The Churchill*   Washington,     72%          173    124   122.99
The Melrose*     Washington,     72%          240    172   122.00
* These hotels are owned by a joint venture in which Ashford hold an
approximate 72% common equity interest and a $25 million preferred equity
interest. To the extent Ashford has the opportunity to acquire the entire
interest in these hotels or controls the right to sell these hotels, the right
of first offer agreement between Ashford Prime and Ashford will extend to
these properties.
(1)Represents total Hotel EBITDA, not pro rata share.

                Year Ended December 31, 2012
                        Hilton  Courtyard           Marriott            Renaissance
                The     La      San       Courtyard Plano    Seattle    Tampa         Courtyard    Hotel   Corporate /  Ashford
                Capital Jolla   Francisco Seattle   Legacy   Marriott   International Philadelphia Total   allocated(1) Hospitality
                Hilton  Torey   Downtown  Downtown  Town     Waterfront Plaza         Downtown                          Prime, Inc.
                        Pines                       Center
Net income
attributable to $5,144  $2,592  $7,363    $3,037    $5,045   $6,724     $2,950        $4,337       $37,192 ($41,373)    ($4,545)
the Company
Income from
entities        1,824   966     -         -         -        -          -             -            2,790   -            2,790
attributable to
Net income      6,968   3,558   7,363     3,037     5,045    6,724      2,950         4,337        39,982  (41,373)     (1,755)
Non Property    -       -       -         -         -        -          -             -            -       13,512       13,512
Interest income (1)     (2)     (3)       (1)       (1)      (2)        -             (2)          (12)    (16)         (28)
Interest        -       -       -         -         -        -          -             2,096        2,096   27,821       29,917
Amortization of -       -       -         -         -        -          -             33           33      -            33
loan costs
and             7,474   4,855   2,773     1,778     3,338    3,783      2,193         3,356        29,550  (2,925)      26,626
Income tax      572     484     -         -         -        -          -             (17)         1,039   3,345        4,384
EBITDA          272     3       2         46        10       16         1             2            352     -            352
amounts         $15,285 $8,898  $10,135   $4,860    $8,392   $10,521    $5,144        $9,805       $73,040 -            $73,040
attributable to
Less Hotel
attributable to (3,821) (2,225) -         -         -        -          -             -            (6,046) -            (6,046)
attributable to $11,464 $6,673  $10,135   $4,860    $8,392   $10,521    $5,144        $9,805       $66,994 -            $66,994
the Company

(1) Represents expenses not recorded at the individual hotel property

Ashford Hospitality Trust is a real estate investment trust (REIT) focused on
investing opportunistically in the hospitality industry across all segments
and at all levels of the capital structure primarily within in the United
States. Additional information can be found on the Company's website at

Follow Chairman and CEO Monty Bennett on Twitter at or @MBennettAshford.

Certain statements and assumptions in this press release contain or are based
upon "forward-looking" information and are being made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and uncertainties. When
we use the words "will likely result," "may," "anticipate," "estimate,"
"should," "expect," "believe," "intend," or similar expressions, we intend to
identify forward-looking statements. Such forward-looking statements include,
but are not limited to, the timing for closing, the impact of the transaction
on our business and future financial condition, our business and investment
strategy, our understanding of our competition and current market trends and
opportunities and projected capital expenditures. Such statements are subject
to numerous assumptions and uncertainties, many of which are outside Ashford's

These forward-looking statements are subject to known and unknown risks and
uncertainties, which could cause actual results to differ materially from
those anticipated, including, without limitation: general volatility of the
capital markets and the market price of our common stock; changes in our
business or investment strategy; availability, terms and deployment of
capital; availability of qualified personnel; changes in our industry and the
market in which we operate, interest rates or the general economy; and the
degree and nature of our competition. These and other risk factors are more
fully discussed in Ashford's filings with the Securities and Exchange
Commission. EBITDA is defined as net income before interest, taxes,
depreciation and amortization. Hotel EBITDA is adjusted EBITDA for the hotel
properties before corporate general and administrative expense, before
corporate-level property taxes, insurance and other items and after other
adjustments. EBITDA yield is defined as trailing twelve month EBITDA divided
by the purchase price. EBITDA multiple is defined as the purchase price
divided by the annual EBITDA. A capitalization rate is determined by dividing
the property's annual net operating income by the purchase price. Net
operating income is the property's funds from operations minus a capital
expense reserve of either 4% or 5% of gross revenues. Funds from operations
("FFO"), as defined by the White Paper on FFO approved by the Board of
Governors of the National Association of Real Estate Investment Trusts
("NAREIT") in April 2002, represents net income (loss) computed in accordance
with generally accepted accounting principles ("GAAP"), excluding gains (or
losses) from sales of properties and extraordinary items as defined by GAAP,
plus depreciation and amortization of real estate assets, and net of
adjustments for the portion of these items related to unconsolidated entities
and joint ventures.

The forward-looking statements included in this press release are only made as
of the date of this press release. Investors should not place undue reliance
on these forward-looking statements. We are not obligated to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or circumstances, changes in expectations or

SOURCE Ashford Hospitality Trust, Inc.

Contact: David Kimichik, Chief Financial Officer, (972) 490-9600; Deric
Eubanks, SVP - Finance,(972) 490-9600; Elise Chittick, Investor Relations,
(972) 778-9487; Scott Eckstein, Financial Relations Board, (212) 827-3766
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