ASHFORD HOSPITALITY TRUST INC (Form: 8-K, Received: 04/10/2024 17:13:08)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): April 9, 2024

ASHFORD HOSPITALITY TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland

001-31775

86-1062192

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(IRS employer identification number)

14185 Dallas Parkway, Suite 1200

Dallas

Texas

75254

(Address of principal executive offices)

(Zip code)

Registrant’s telephone number, including area code: (972) 490-9600

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

AHT

New York Stock Exchange

Preferred Stock, Series D

AHT-PD

New York Stock Exchange

Preferred Stock, Series F

AHT-PF

New York Stock Exchange

Preferred Stock, Series G

AHT-PG

New York Stock Exchange

Preferred Stock, Series H

AHT-PH

New York Stock Exchange

Preferred Stock, Series I

AHT-PI

New York Stock Exchange

ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

On April 9, 2024, PIM Boston Back Bay LLC and PIM TRS Boston Back Bay LLC (the “Sellers”), indirect, wholly-owned subsidiaries of Ashford Hospitality Trust, Inc. (the “Company”), completed the sale of the Hilton Boston Back Bay hotel pursuant to an Agreement of Purchase and Sale, dated as of January 29, 2024, by and between the Sellers and Beantown Hotel Owner LLC, for $171 million in cash, subject to customary pro-rations and adjustments.

ITEM 7.01 REGULATION FD DISCLOSURE.

On April 10, 2024, the Company issued a press release announcing the closing of the sale of the Hilton Boston Back Bay hotel. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information in this Item 7.01 of this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(b) Pro Forma Financial Information. The unaudited pro forma financial information required to be disclosed under Item 9.01(b) of Form 8-K as of and for the year ended December 31, 2023, is attached hereto as Exhibit 99.2 and is incorporated by reference herein.

(d) Exhibits

Exhibit Number Description

99.1 Press Release of the Company, dated April 10 , 2024

99.2 Unaudited Pro Forma Financial Information of Ashford Hospitality Trust, Inc.

104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	ASHFORD HOSPITALITY TRUST, INC.

Dated: April 10, 2024	By:	/s/ Alex Rose
		Alex Rose
		Executive Vice President, General Counsel & Secretary

EXHIBIT 99.1

NEWS RELEASE


Contact:	Deric Eubanks	Jordan Jennings	Joseph Calabrese
	Chief Financial Officer	Investor Relations	Financial Relations Board
	(972) 490-9600	(972) 778-9487	(212) 827-3772

ASHFORD HOSPITALITY TRUST ANNOUNCES PROGRESS

IN PLAN TO PAY OFF STRATEGIC FINANCING WITH CLOSING

OF SALE OF THE HILTON BOSTON BACK BAY

DALLAS – April 10, 2024 – Ashford Hospitality Trust, Inc. (NYSE: AHT) (“Ashford Trust” or the “Company”) today announced that it has closed on the sale of the 390-room Hilton Boston Back Bay in Boston, Massachusetts for $171 million ($438,000 per key). All of the proceeds from the sale were used for debt reduction including approximately $68 million to pay down the Company’s strategic financing.

“We are pleased to announce the closing of the sale of the Hilton Boston Back Bay for a very attractive value and the significant progress we’ve made in paying down our strategic financing,” commented Rob Hays, Ashford Trust’s President and Chief Executive Officer. “With this recent paydown, the remaining balance on our strategic financing is now approximately $112 million, and going forward, we plan to make regular paydowns with proceeds from the sale of our non-traded preferred stock and other asset sales. We continue to have several assets in the market at various stages of the sales process and look forward to providing more updates in the coming weeks.”

* * * * *

Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing predominantly in upper upscale, full-service hotels.

Forward-Looking Statements

Certain statements and assumptions in this press release contain or are based upon “forward-looking” information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, among others, statements about the Company’s strategy and future plans, including its plans to raise capital through a combination of asset sales, mortgage debt refinancings and non-traded preferred capital raising and to pay off its strategic financing. These forward-looking statements are subject to risks and uncertainties. When we use the words “will likely result,” “may,” “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” “could,” “plan,” or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside of Ashford Trust’s control.

These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: our ability to raise sufficient capital to pay off our strategic debt; our ability to repay, refinance, or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Ashford Trust’s filings with the Securities and Exchange Commission.

The forward-looking statements included in this press release are made only as of the date of this press release. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations, or otherwise, except to the extent required by law.

EXHIBIT 99.2

On April 9, 2024, Ashford Hospitality Trust, Inc. (“Ashford Trust” or the “Company”) completed the sale of the 144-room Hilton Boston Back Bay located in Boston, Massachusetts (“Hilton Back Bay”) for $167.0 million in cash, net of selling expenses. Additionally, the Company repaid approximately $98.0 million on the mortgage loan secured by the Hilton Back Bay.

The following unaudited pro forma financial information of the Company, as of and for the year ended December 31, 2023 has been prepared for informational purposes only and does not purport to be indicative of what would have resulted had the disposition occurred on the date indicated or what may result in the future. The unaudited pro forma consolidated balance sheet assumes the disposition closed on December 31, 2023. The unaudited pro forma consolidated statements of operations for the year ended December 31, 2023, assumes the disposition closed on January 1, 2023. The unaudited pro forma financial information of the Company reflects the removal of the assets and liabilities of the Hilton Back Bay and its results of operations, which contains a non-recurring loss associated with the disposition of the hotel property. The pro forma loss and the related tax effects resulting from the disposition of the Hilton Back Bay are preliminary. Therefore, the actual results may differ from the amounts reflected in the pro forma financial statements. There are no other non-recurring items associated with the transaction.

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

December 31, 2023

(in thousands, except share and per share amounts)


	Ashford Trust Consolidated Historical (A)		Hilton Back Bay (B)		Adjustments			Ashford Trust Consolidated Pro Forma
ASSETS


Investments in hotel properties, net ($122,938 attributable to VIEs).	$	2,951,932	$	167,119	$	—		$	2,784,813
Cash and cash equivalents ($2,363 attributable to VIEs)	165,231		1,746		166,950		(C) (i)	235,014
					2,579		(C) (i)
					(98,000)		(C) (ii)
Restricted cash ($17,346 attributable to VIEs)	146,079		3,695		—			142,384

Accounts receivable, net of allowance ($271 attributable to VIEs)	45,521		526		—			44,995
Inventories	3,679		80		—			3,599
Notes receivable, net	7,369		—		—			7,369


Investments in unconsolidated entities	9,960		—					9,960


Deferred costs, net ($218 attributable to VIEs)	1,808		12		(12)		(C) (i)	1,784
Prepaid expenses ($651 attributable to VIEs)	12,806		320		—			12,486
Derivative assets	13,696		—		—			13,696
Operating lease right-of-use assets	44,047		—		—			44,047
Other assets($1,433 attributable to VIEs)	25,309		8		—			25,301
Intangible assets	797		—		—			797



Due from third-party hotel managers	21,664		—		—			21,664
Assets held for sale	12,383		—		—			12,383
Total assets	$	3,462,281	$	173,506	$	71,517		$	3,360,292
LIABILITIES AND EQUITY/DEFICIT
Liabilities:
Indebtedness, net ($70,073 attributable to VIEs)	$	3,396,071	$	97,063	$	(97,063)	(C) (ii)	$	3,201,945
Finance lease liability	18,469		—		—			18,469
Other finance liability ($26,858 attributable to VIEs)	26,858		—		—			26,858
Accounts payable and accrued expenses ($14,405 attributable to VIEs)	129,323		2,898		—			126,425
Accrued interest payable ($241 attributable to VIEs)	27,009		781		—			26,228
Dividends and distributions payable	3,566		—		—			3,566

Due to Ashford Inc., net ($1,396 attributable to VIEs)	13,261		—		—			13,261

Due to related parties, net ($123 attributable to VIEs)	5,874		117		—			5,757
Due to third-party hotel managers ($110 attributable to VIEs)	1,193		—		—			1,193
Intangible liabilities, net	2,017		—		—			2,017
Operating lease liabilities	44,765		—		—			44,765

Other liabilities	3,499		—		—			3,499
Liabilities related to assets held for sale	14,653		—		—			14,653
Total liabilities	3,686,558		100,859		(97,063)			3,488,636
Commitments and contingencies
Redeemable noncontrolling interests in operating partnership	22,007		—		—			22,007
Series J Redeemable Preferred Stock, $0.01 par value, 3,475,318 shares issued and outstanding at December 31, 2023	79,975		—		—			79,975
Series K Redeemable Preferred Stock, $0.01 par value, 194,193 shares issued and outstanding at December 31, 2023	4,783		—		—			4,783
Equity (deficit):
Preferred stock, $0.01 par value, 50,000,000 shares authorized:
Series D Cumulative Preferred Stock, 1,159,927 shares issued and outstanding at December 31, 2023	12		—		—			12
Series F Cumulative Preferred Stock, 1,251,044 shares issued and outstanding at December 31, 2023	11		—		—			11
Series G Cumulative Preferred Stock, 1,531,996 shares issued and outstanding at December 31, 2023	15		—		—			15
Series H Cumulative Preferred Stock, 1,170,325 shares issued and outstanding at December 31, 2023	12		—		—			12
Series I Cumulative Preferred Stock, 1,160,923 shares issued and outstanding at December 31, 2023	12		—		—			12
Common stock, $0.01 par value, 400,000,000 shares authorized, 37,422,056 shares issued and outstanding at December 31, 2023	374		—		—			374
Additional paid-in capital	2,382,975		72,647		167,119		(C) (i)	2,480,026
					2,579		(C) (i)

Accumulated deficit	(2,729,312)		—		(181)		(C) (i)	(2,730,430)
					(937)		(C) (ii)
Total stockholders’ equity (deficit) of the Company	(345,901)		72,647		168,580			(249,968)
Noncontrolling interest in consolidated entities	14,859		—		—			14,859
Total equity (deficit)	(331,042)		72,647		168,580			(235,109)
Total liabilities and equity/deficit	$	3,462,281	$	173,506	$	71,517		$	3,360,292

See accompanying notes.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(A)Represents the historical consolidated balance sheet of Ashford Trust as of December 31, 2023, as reported in its Annual Report on Form 10-K for the year ended December 31, 2023, filed on March 14, 2024.

(B)Represents the removal of the historical balance sheet of the Hilton Back Bay as of December 31, 2023.

(C)Represents adjustments for Ashford Trust’s disposition of the Hilton Back Bay as of December 31, 2023, which includes: (i) an adjustment for the cash consideration received of $167.0 million, net of selling expenses and cash received for hotel net working capital; and (ii) the cash paid to repay the mortgage loan secured by the Hilton Back Bay.

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

Year Ended December 31, 2023

(in thousands, except share and per share amounts)


	Ashford Trust Consolidated Historical (A)		Hilton Back Bay (B)		Adjustments			Ashford Trust Consolidated Pro Forma
REVENUE
Rooms	$	1,059,155	$	37,619	$	—		$	1,021,536
Food and beverage	232,829		3,858		—			228,971
Other hotel revenue	72,748		4,286		—			68,462
Total hotel revenue	1,364,732		45,763		—			1,318,969
Other	2,801		—		—			2,801
Total revenue	1,367,533		45,763		—			1,321,770
EXPENSES
Hotel operating expenses:
Rooms	249,434		7,955		—			241,479
Food and beverage	161,300		3,585		—			157,715
Other expenses	464,058		13,226		—			450,832
Management fees	50,645		1,366		—			49,279
Total hotel expenses	925,437		26,132		—			899,305
Property taxes, insurance and other	70,226		3,200		—			67,026
Depreciation and amortization	187,807		4,689		—			183,118



Advisory services fee	48,927		—		—			48,927
Corporate, general and administrative	16,181		—		—			16,181
Total operating expenses	1,248,578		34,021		—			1,214,557
Gain (loss) on consolidation of VIE and disposition of assets	11,488		—		(181)		(C) (i)	11,307
OPERATING INCOME (LOSS)	130,443		11,742		(181)			118,520
Equity in earnings (loss) of unconsolidated entities	(1,134)		—					(1,134)
Interest income	8,978		—		—			8,978
Other income (expense)	310		—		—			310
Interest expense and amortization of discounts and loan costs	(366,148)		(9,450)		—			(356,698)
Write-off of premiums, loan costs and exit fees	(3,469)		—		(937)		(C) (ii)	(4,406)
Gain (loss) on extinguishment of debt	53,386		—		—			53,386

Realized and unrealized gain (loss) on derivatives	(2,200)		—		—			(2,200)
INCOME (LOSS) BEFORE INCOME TAXES	(179,834)		2,292		(1,118)			(183,244)
Income tax (expense) benefit	(900)		—		—			(900)




NET INCOME (LOSS)	(180,734)		2,292		(1,118)			(184,144)
(Income) loss attributable to noncontrolling interest in consolidated entities	6		—		—			6
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	2,239		—		43		(C) (iii)	2,282
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	(178,489)		2,292		(1,075)			(181,856)
Preferred dividends	(15,921)		—		—			(15,921)
Deemed dividends on redeemable preferred stock	(2,673)		—		—			(2,673)
Gain (loss) on extinguishment of preferred stock	3,390		—		—			3,390
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(193,693)	$	2,292	$	(1,075)		$	(197,060)
INCOME (LOSS) PER SHARE - BASIC:
Net income (loss) attributable to common stockholders	$	(5.61)						$	(5.71)
Weighted average common shares outstanding—basic	34,523							34,523
INCOME (LOSS) PER SHARE - DILUTED:
Net income (loss) attributable to common stockholders	$	(5.61)						$	(5.71)
Weighted average common shares outstanding—diluted	34,523							34,523

See accompanying notes.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(A)Represents the historical consolidated statement of operations of Ashford Trust for the year ended December 31, 2023, as reported in its Annual Report on Form 10-K for the year ended December 31, 2023, filed on March 14, 2024.

(B)Represents the removal of the historical consolidated statements of operations of the Hilton Back Bay for the year ended December 31, 2023.

(C)Represents adjustments for the Company’s sale of the Hilton Back Bay, which includes: (i) the estimated non-recurring loss on the disposition of the Hilton Back Bay for the year ended December 31, 2023; (ii) an adjustment for the write-off of deferred loan costs, and (iii) the net (income) loss allocated to redeemable noncontrolling interests in operating partnership related to the disposition of the Hilton Back Bay, including the estimated non-recurring loss for the year ended December 31, 2023, based on an ownership percentage of 1.27% for the year ended December 31, 2023. There is no estimated tax effect of the hotel no longer being part of the consolidated group for the year ended December 31, 2023. The pro forma loss resulting from the disposition of the Hilton Back Bay is preliminary. The actual results may differ from the amounts reflected in the pro forma financial statements.