DALLAS—Ashford Hospitality Trust Inc. announced today that it has signed a definitive agreement to acquire the 357-room Fremont Marriott Silicon Valley hotel. The acquisition is expected to close within the next 30 days. Located in the vibrant Silicon Valley submarket of the Bay Area in Northern California, the hotel features approximately 15,000 square feet of meeting space spread across 19 flexible meeting areas. Upon closing, the property will be managed by Remington Lodging. The Company intends to finance the property with approximately $37.5 million of non-recourse mortgage debt.
“We are very excited with this acquisition considering its significant upside potential. As the only full-service hotel in Fremont, the Fremont Marriott is well positioned within the marketplace to draw corporate demand from neighboring companies in Silicon Valley and the surrounding Bay Area,” said Monty J. Bennett, Ashford Trust’s chairman and chief executive officer. “This hotel offered us an exceptional opportunity. It has a prime location in a high barrier to entry market, and the property recently completed a renovation allowing it to provide best-in-class product quality and services. With the ability to install our affiliated property manager, Remington Lodging, as the new property manager for the hotel, we expect the operating performance of the hotel to improve significantly.”
On a trailing-12 month basis, the Fremont/Newark submarket has seen RevPAR growth of 15.4 percent through May 2014. The robust strength of the Bay Area economy and the continued growth in the technology sector combined with increasing visitation to the area is expected to make the Bay Area and Silicon Valley one of the country’s top annual RevPAR growth markets in 2014. The hotel is located directly off Interstate 880 at the gateway to Silicon Valley, near the southern tip of the San Francisco Bay. This ideal location is home to over 1,200 high-tech, life sciences and clean technology companies headquartered in the Silicon Valley area and provides exceptional access to many popular Bay Area attractions.
Originally developed in 1999, the Fremont Marriott Silicon Valley features a sleek, modern facade with 357 well equipped guestrooms and approximately 15,000 square feet of meeting space including the 7,590-square-foot Grand Ballroom. Amenities include an indoor pool and whirlpool, 24-hour fitness center, the Great Room restaurant and lounge, and complimentary on-site parking.
The Fremont Marriott Silicon Valley is in exceptional condition with minimal capex needs, having already undergone several renovations, the most recent of which was an approximate $8.1 million ($23,000 per key) renovation and PIP completed in 2013. The hotel received a Renovation Excellence award from Marriott in 2012.