Ashford Inks Agreement to Sell Residence Inn San Diego Sorrento Mesa

Ashford Hospitality Trust AHT recently signed a definitive agreement to sell the 150-room Residence Inn San Diego Sorrento Mesa in San Diego, CA, for $42 million. Subject to closing conditions, the sale is expected to be completed in October 2025.

Taking into consideration the company's expected capital expenditures of $16 million, the sale price indicates a capitalization rate of 5.7% based on net operating income, which corresponds to a multiple of 15.3 times Hotel EBITDA for the 12 months that ended on July 31, 2025. Excluding the anticipated capital spend, the combined sale price indicates a capitalization rate of 7.9% on net operating income, or a multiple of 11.1 times Hotel EBITDA for the 12 months that concluded on July 31, 2025.

Per Stephen Zsigray, president and CEO, "The planned sale of the Residence Inn San Diego Sorrento Mesa reflects our ongoing strategy to opportunistically deleverage the portfolio while creating value for our shareholders. This transaction provides us with increased financial flexibility moving forward."

AHT: In a Snapshot

As Ashford moves closer to addressing the strategic financing challenges, it demonstrates a clear focus on creating value for shareholders. The company’s assets are well-positioned to capitalize on favorable market conditions while achieving its financial and operational objectives

Over the past three months, shares of this Zacks Rank #3 (Hold) company have gained 5.6% compared with the industry’s growth of 0.7%.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Plymouth Industrial REIT PLYM and Crown Castle CCI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for PLYM’s 2025 FFO per share has moved 2 cents northward to $1.88 over the past month.

The Zacks Consensus Estimate for CCI’s 2025 FFO per share has moved 3 cents upward to $4.21 over the past month.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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