6/25/2024
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Standard and Poors has published an interesting read on Lodging, Retail and Residential REITs–many of which have preferred shares outstanding.
I have positions in RLJ Lodging (RLJ) and Pebblebrook (PEB) and they are in the report – in the case of PEB not necessarily in a good light. One of the metrics used is Net Debt/EBITDA–the relatively high leverage shown in the report seems higher than I would have expected so I will need to review that closer.
The article can be found here.
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.