Ashford Hospitality Prime, Inc. (NYSE: AHP) announced today that it has reached an agreement for an extension of the ground lease at the Hilton La Jolla Torrey Pines hotel.
The four-star, 394-room Hotel sits on 11.38 acres owned by the City of San Diego. Located adjacent to the legendary Torrey Pines Golf Course and the Torrey Pines State Preserve, the first-class amenities and dramatic views of the Pacific Ocean make the Hotel one of the premier resorts in the San Diego area. The Hotel is owned in a joint venture between subsidiaries of Ashford Prime and Park Hotels & Resorts, Inc. (NYSE: PK) with Ashford Prime holding a 75% interest in the joint venture. The lease, which currently expires in 2043, will be extended by 24 years and will now expire in 2067. Through this agreement, the Company was also able to secure options to further extend the ground lease by either 10 or 20 additional years depending on the amount of capital expenditures invested in the Hotel during the term.
"This has been a complex transaction that has taken us some time, but we were finally able to reach mutually acceptable terms with the City of San Diego and are pleased to make a longer-term commitment to the Hotel and the City. In addition to adding significant term to the current lease, this agreement also provides a significant extension opportunity should we invest in the property at similar levels as we have historically," said Richard J. Stockton, Ashford Prime's President and Chief Executive Officer. "This extension is yet another example of our team's ability to execute on strategic opportunities to create additional value in our assets."
Ashford Hospitality Prime is a real estate investment trust (REIT) focused on investing in luxury hotels and resorts. Park Hotels & Resorts Inc. is a publicly traded lodging real estate investment trust with a diverse portfolio of market-leading hotels and resorts.
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