Pure-Play REITs: Ashford Hospitality Prime (AHP)
AHP is a micro-cap REIT spun off from its larger parent — Ashford Hospitality Trust (AHT) — last November. AHT management came to the conclusion that its properties with higher revenue per available room (RevPAR) were better suited within a second REIT where investors could more easily value those assets. AHP is now 10 hotels (two acquired since spinoff) with an option for 12 of AHTs more expensive properties.
Regardless of whether it exercises those options, AHP’s focus on full-service hotels with RevPARs of at least twice the national average is a good one. I recently recommended AHP as a spinoff candidate that will likely outperform its parent over the next 12-18 months.
In my mind you can’t go wrong operating at the higher end of the customer food chain. Look for AHP to buy some interesting properties over the next year or two.