Lodging REIT Ashford Hospitality (AHT) has finally suspended their preferred stock dividends. It was obvious that this was coming. Shares are tumbling on the official news (we all knew this was coming–only a fool would keep paying when they are fighting for survival).
The company joins Hersha Hospitality (HT) and Sotherly Hotels (SOHO) in having their preferred dividends suspended.
The preferreds are cumulative, meaning they will have to pay the suspended dividends before they ever pay another common dividend. This assumes that the company is solvent enough in the future to do so.
Ashford carries a ton of debt (over $4 billion)–but all debt is at the property level so I suspect we will see the REIT walk away from many properties instead of continuing to make debt payments–the company has over $200 million of cash on hand.