Ashford Hospitality Trust and Prudential Real Estate Investors complete USD103m financing on Hilton Boston Back Bay
Ashford Hospitality Trust, along with its joint venture partner, Prudential Real Estate Investors, has closed a USD103m loan secured by the Hilton Boston Back Bay Hotel in Boston, Massachusetts.
The hotel is part of the company's Highland Hospitality Portfolio, which is held in a joint venture with PREI, of which Ashford has a 71.74 per cent ownership interest.
The new financing, which has a five-year term and bears interest at a fixed interest rate of 4.38 per cent, replaces an existing USD63m loan on the property with a fixed interest rate of 5.96 per cent.
At closing, USD31.9m of the excess loan proceeds were used to pay down the mezzanine debt balance on the overall Highland Hospitality Portfolio, which had an average interest rate of 8.4 per cent, thereby achieving annual interest savings of approximately USD2m.
"We continue to take advantage of the current favourable interest rate environment and attractive debt capital markets, allowing us to further decrease our annual interest expense on the Highland Hospitality Portfolio," says Monty J Bennett, chief executive officer of Ashford Hospitality Trust. "We are also actively pursuing early refinancing of other hotel assets to lower our interest rate and obtain excess proceeds. This strategy is succeeding in reducing near term refinancing risk while increasing the weighted average maturity of our loans. We hope to have an update soon on the progress of our other refinancing initiatives, including the Renaissance Nashville and Westin Princeton loans. As always, we remain keenly focused on maximising value for our shareholders."