Ashford Hospitality Trust has signed a definitive agreement to sell the 242-room Hilton Houston NASA Clear Lake located in Houston for $27.0 million. The sale is expected to be completed in June and is subject to normal closing conditions. Other terms and conditions were not disclosed.
According to the Houston Business Journal, the property will convert to a Compass by Margaritaville once the purchase by Fischer Acquisitions and Development goes through. The hotel will be closed during construction, which is expected to take 12-18 months.
"We are pleased to announce the signed agreement to sell the Hilton Houston NASA Clear Lake at a very attractive cap rate," Ashford Trust's President and CEO Stephen Zsigray said in a statement. "This sale will deleverage our Morgan Stanley 17 Pool loan, and result in significant capital expenditure savings. Combined with our "GRO AHT" initiative, we're excited about the potential for opportunistic sales to further transform the company and have additional assets in the market at various stages of the sales process."
The 14-story Hilton opened in 1982, located just across from the Johnson Space Center. The hotel would also shrink from its current 242 rooms to 170 in addition to 30 condos added.
When adjusted for the company's anticipated capital expenditures, the sale price represents a 3.2 percent capitalization rate on net operating income or 23.6x Hotel EBITDA for the twelve months ended April 30. Excluding the anticipated capital spend, the sale price represents a 5.0 percent capitalization rate on net operating income or 15.2x Hotel EBITDA for the twelve months ended April 30.