Douglas Kessler, president and CEO of Ashford Hospitality Trust, Inc. (NYSE: AHT), joined Nareit in New York for a video interview at REITweek: 2019 Investor Conference.
Ashford recently made its first direct hotel investment in New York—the only Embassy Suites asset in Manhattan. Kessler explained that the REIT had been looking in that market for some time, evaluating metrics such as supply/demand and revenue per available room (RevPAR).
“We felt that we timed it just right…what we saw was that New York had experienced pretty stable occupancy, but what [had] changed is that there was a rebound in average daily rates and that attracted us. Profitability of New York hotels was also improving, which we found compelling,” Kessler said.
Meanwhile, Kessler said that following a strong year for transactions in 2018, this year has seen a slowdown in activity, particularly for portfolios. “The good news overall is that prices are holding up,” he noted. In addition, Ashford is seeing benefits from its Enhanced Return Funding Program with its sponsor, Ashford Inc. The program “makes good deals great deals,” Kessler said.
In terms of dispositions, Kessler said the REIT has sold about $375 million since 2015, as it culls some of the lower RevPAR and less strategic hotels.