Troubled hotel owner Ashford Hospitality Trust has extended a mortgage loan backing some of its most valuable U.S. hotels as it suspends shareholder dividends in an effort to preserve liquidity.
The Dallas-based real estate investment trust paid $10 million to extend its $723.6 million Highland mortgage loan backing 18 hotels in what executives have previously called its "most valuable pool of assets." The loan balance represents roughly 65% of the value of the undisclosed hotels included in the loan pool, with its final maturity date now being July 9, 2026.
The REIT also decided to suspend preferred dividends to preserve liquidity as it evaluates strategic alternatives for its business. In December, Ashford unveiled it was exploring its options, including a potential sale, to deleverage its business. The REIT, with 67 hotels in its portfolio, last reported it had $2.6 billion in loans.
Ashford Hospitality has also been offloading hotels in its portfolio, including three that sold in November. Executives did not immediately respond to an emailed request for additional information.
The REIT said it plans to continue to evaluate potential future dividends on a quarterly basis.
Ashford, like its peers in the U.S. hotel industry, was hit hard financially by the onset of the pandemic. In the past year, CEO Stephen Zsigray told investors his team has "continued to make improvements to our capital structure" by managing operating costs and assets.