Ashford Hospitality Trust extended a mortgage loan backing its "most valuable pool of assets" totaling 18 hotels and valued at nearly $1.1 billion to secure more time to find new financing, officials told investors.
The Dallas-based real estate investment trust was able to extend the loan in a move that eliminated about $6.8 million in "default interest" on its Highland mortgage loan secured by 18 hotels, Chief Financial Officer Deric Eubanks told investors during the company's second-quarter earnings call. The loan extension took the loan from an expiration of April 9, 2025, to Jan. 9, 2026, with an opportunity to extend that further by six months to July 9, 2026, the company said.
President and CEO Stephen Zsigray told investors during Thursday's earnings call that macroeconomic headwinds were pressuring the industry and he was pleased with the REIT's operating performance that reflects the impact of the team's decisions in recent quarters — including securing a short-term extension on its Highland mortgage portfolio.
"We're reaping the benefits of the tremendous efforts that our asset management team and property managers have made to drive revenue growth, while aggressively managing operating expenses," Zsigray said during the earnings call. "We have also continued to make improvements to our capital structure."
As part of the loan extension, Ashford paid down the loan to a current balance of $733.6 million, or roughly 68% of the hotel pool's appraised value. The REIT did not disclose the addresses of the 18 hotels and a spokesperson for the company did not immediately respond to a request for comment.
At the close of the second quarter on June 30, the REIT had 72 hotels with more than 17,000 rooms in its portfolio. However, Ashford entered into a definitive agreement in the second quarter to sell the 242-room Hilton Houston NASA Clear Lake in the greater Houston area in a $27 million deal.
In the second quarter, Ashford also extended its Morgan Stanley Pool mortgage loan secured by 17 hotels, pushing the initial maturity date from November 2024 to March 2026 with two, one-year extension options. The addresses of those 17 hotels were also not disclosed.
Even with the loan extensions and the upcoming sale of a hotel, Ashford reported a net loss for the second quarter of $39.9 million, or $6.88 per diluted share. Comparable revenue per available room also took a hit of 2.2% during the period to $145.
Ashford has $2.7 billion of total loans as of June 30, with a blended average interest rate of 8.1%.
Chris Nixon, Ashford's executive vice president and head of asset management, told investors during the REIT's earnings call the second quarter was expected to be "the softest period of 2025" for group business because of the late Easter holiday and "continuing headwinds" tied to cuts being made by Department of Government Efficiency, known as DOGE, on government-related travel.
The team has come up with some targeted initiatives to win business despite headwinds, Nixon said, a move the REIT unleashed on Marriott Crystal Gateway in Arlington, Virginia, near Washington, D.C., that boosted its on-site revenue.
Likewise, Ashford is preparing for the upcoming World Cup next year with about 22% of its asset portfolio being located in a host city, Nixon said.
For the remainder of 2025, the REIT remains "focused on identifying additional opportunities to further strengthen hotel level performance, and maximize long-term shareholder value," Nixon added.