Monty Bennett’s Dallas-based Braemar Hotels and Resorts is seeking a buyer for its portfolio of 14 properties nationwide. The real estate investment trust, which operates under brands such as Marriott’s Autograph Collection, Hilton, Sofitel, Four Seasons, and Ritz-Carlton, has seen its stock price drop to about one-tenth of its 2013 value. The company currently holds more than $1.1 billion in debt and has about $473 million in stock.
The board of directors at Braemar recently decided that selling the company would be the best way to preserve shareholder value. Richard Stockton, CEO of Braemar, stated that “the company is well-positioned to attract private investor interest,” noting that current market conditions—including limited room supply and strong consumer spending—make for a favorable sales environment.
Braemar has hired Robert W. Baird & Company as its financial advisor to oversee the sale process. Monty Bennett commented: “Hotel portfolios like the Braemar portfolio do not come to the market very often, and we believe the opportunity to acquire this iconic portfolio will attract significant buyer interest from around the world and result in an attractive valuation for shareholders.”
If Braemar is sold, Ashford Hospitality Trust—another hospitality firm chaired by Bennett—would receive a $480 million payment.
Last year, both companies were involved in a proxy battle with Blackwells Capital, an investor seeking changes on Braemar’s board. The dispute ended with an agreement to expand Braemar’s board and drop litigation against Blackwells. Following this resolution, Blackwells purchased 3.5 million shares of Braemar when shares were priced at about $2.46 each.
Ashford Hospitality Trust has been active in recent hotel transactions. It recently sold Houston’s Hilton Houston NASA Clear Lake for $27 million and a Residence Inn in Evansville, Indiana for $6 million. The company also made a cash offer of $32 million for a downtown San Antonio office building it plans to convert into an Autograph Collection Hotel.
Earlier this year, Ashford secured a $580 million refinancing package covering 16 hotels across Florida and California. Although a special servicer reported that Ashford failed to refinance another distressed portfolio of 18 hotels spread over 13 states, Ashford stated it received an extension on the loan until January while waiting for potential declines in interest rates.
Founded by Monty Bennett in 1968, Ashford Hospitality Trust owns 66 hotels across 21 states and went public in 2003.
