BRAEMAR HOTELS & RESORTS ANNOUNCES CONCLUSION OF STRATEGIC REVIEW PROCESS AND PLAN TO BECOME A SELF-MANAGED REIT AND REMAIN PUBLICLY TRADED
Rhea-AI Summary
Braemar Hotels & Resorts (NYSE:BHR) completed a strategic review and plans to become a self-managed REIT while remaining publicly traded. The company will terminate its advisory agreement and other major contracts with Ashford, directly hire management, and relocate to new Dallas headquarters.
Braemar targets a focused portfolio of 6–8 luxury properties in the U.S. and Caribbean, with over $1 billion in gross asset value and $300–$350 million in trailing twelve-month revenue. According to Braemar, self-management is expected to reduce G&A costs by more than $25 million annually.
The board will be largely reconstituted with five new independent directors and an independent chair, with CEO Richard Stockton remaining on the board. Asset sales, including two or three additional hotels, are expected to fund obligations tied to the Ashford advisory termination, while Braemar intends not to sell all or substantially all assets.
Positive
- Expected reduction of general and administrative costs by more than $25 million annually
- Focused portfolio of 6–8 luxury properties with over $1 billion gross asset value
- Trailing twelve-month revenue of approximately $300–$350 million from the targeted portfolio
- Termination of Ashford master agreements increases flexibility to select third-party service providers
- Planned addition of five new independent directors and an independent chair to the board
- Planned move to a self-managed REIT structure with in-house management alignment
Negative
- Company Sale Fee under the Ashford advisory agreement will be triggered by asset sale closings
- Net proceeds from future asset sales will be used to pay Ashford fees instead of retained by Braemar
- Braemar expects to sell an additional two or three assets to satisfy fee obligations tied to termination
News Market Reaction – BHR
In the Jun 12 session, BHR declined 14.23%, reflecting a significant negative market reaction. Argus tracked a peak move of +4.2% during that session. Argus tracked a trough of -20.1% from its starting point during tracking. Our momentum scanner triggered 38 alerts that day, indicating elevated trading interest and price volatility. Trading volume was exceptionally heavy at 5.8x the daily average, suggesting significant selling pressure.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jun 10 | Activist response | Negative | -0.4% | Al Shams criticized Braemar’s board actions and insider entrenchment concerns. |
| Jun 02 | Board/management change | Negative | -1.2% | Activist response to appointment of another Ashford executive to Braemar’s board. |
| Jun 01 | Asset sale, de-levering | Positive | -1.2% | Sale of Park Hyatt Beaver Creek and repayment of mortgage and convertible notes. |
| May 21 | Preferred dividends | Positive | -0.4% | Declaration of monthly preferred dividends across multiple preferred series. |
| May 08 | Activist letter | Negative | +1.8% | Al Shams open letter to independent directors raising governance concerns. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent BHR news often shows mixed alignment: governance and strategic headlines have produced both aligned negative reactions and divergences, with asset sales and dividend announcements not consistently rewarded by the market.
Over the last several weeks, BHR has been shaped by activism and strategic repositioning. On May 8, an open letter from Al Shams highlighted governance concerns. Subsequent preferred dividend declarations on May 21 and a major Park Hyatt Beaver Creek asset sale on June 1 aimed at strengthening the balance sheet did not generate sustained price strength. Activist responses on June 2 and June 10 underscored board tensions. Today’s move to become a self-managed REIT and overhaul the board fits into this ongoing governance and simplification narrative.
Key Terms
real estate investment trust financial
reit financial
advisory agreement financial
bylaws regulatory
corporate governance guidelines regulatory
code of ethics regulatory
company sale fee financial
master agreement termination fee financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Initiates Process to Terminate Advisory Agreement with Ashford and Its Affiliates in Order to Eliminate Relationship with Ashford and Create Its Own Management Team and New Board
Plans Near-Total Reconstitution of the Board, Including Five New Independent Directors, an Independent Chair, and President and CEO Richard Stockton Continuing His Directorship
Benefits for Shareholders
- A focused business generating significant revenue: On a go-forward basis, the Company intends to maintain a portfolio of approximately six to eight luxury properties across the
U.S . and theCaribbean , which had a gross asset value of over$1 billion $300 $350 million - Long-term cost savings: The Company intends to directly hire employees and relocate to new office space, headquartered in
Dallas . By directly employing its own management team, Braemar expects to reduce G&A costs by more than$25 million - Board and management fully aligned with shareholders' best interests: The in-house management structure and a new Board are designed to improve shareholder alignment. The Company has retained Ferguson Partners, an independent executive search firm, to identify five new independent Board members. The new Board members will be appointed to the Board, with the existing directors simultaneously stepping down, at the termination of the Advisory Agreement and will also be nominated for election at the Company's next annual meeting.
- No disruption to management team: Certain members of the management team currently employed by Ashford will become employees of Braemar, who will work exclusively for the Company and have no ongoing relationship with Ashford or its affiliates.
The Special Committee and the entire Board has worked tirelessly to exhaust all available options to maximize shareholder value. While initially a sale of the Company was explored, the Special Committee ultimately concluded that there was a superior value creation available by terminating the Advisory Agreement, spinning out management, and remaining publicly listed. While the directors have agreed to formally resign their positions, they remain devoted to the future success of the Company.
Rebeca Odino-Johnson, Chairperson of the Special Committee said, "The steps we are announcing today are the result of the Special Committee's thorough review of strategic alternatives and represent what the Board believes is the best outcome for Braemar's shareholders. In formulating the path forward, the Board carefully considered the feedback it has received in the context of ongoing discussions with a number of shareholders, as well as the advice of its independent financial and legal advisors. Braemar's self-management will create meaningful value, and shareholders will benefit from a new, purpose-built Board."
Richard Stockton, Braemar's President and Chief Executive Officer, said, "With a streamlined portfolio, in-house management and renewed focus on operational efficiency, Braemar will be better positioned for long-term profitability, shareholder alignment and value creation. We are also pleased with the consideration we are receiving from the recently announced asset sales at attractive values. We expect to continue evaluating the sale of an additional two or three assets to satisfy the Company's obligations associated with the termination of the Ashford advisory relationship and focus on maximizing the value of our remaining luxury portfolio. We believe that the combination of these factors will be materially accretive to shareholder value."
Transition to Self-Managed REIT
As part of the transition, Braemar will terminate the Advisory Agreement and all other material legacy contractual arrangements with Ashford and its affiliates. Following the termination, management, including Mr. Stockton, will be employed directly by Braemar. This new structure is expected to reduce Braemar's general and administrative costs by more than
The new self-management structure was recommended by the Special Committee and approved by the independent members of the full Board.
Board Refreshment and Corporate Governance Enhancements
Five new independent directors will be identified and added to the Board. Concurrent with these appointments, all existing directors (including the Chairman, Mr. Monty Bennett), except for Mr. Stockton, have agreed to step down from the Board to make way for the new directors. The reconstituted Board will have an independent Chairman.
The Company has retained Ferguson Partners to assist in the search for new directors, with a focus on ensuring that they collectively possess the right mix of skills and experience to oversee the Company and shape its future strategy. No individuals will be appointed who have existing or prior relationships with Ashford, its Chairman and Chief Executive Officer, Monty J. Bennett, or Archie Bennett Jr.
Governance Reforms
The Company is also taking steps to implement best-practice corporate governance reforms to better align the Company with the best interests of all shareholders, including a thorough review and revision of the Company's Bylaws, Corporate Governance Guidelines, Code of Ethics and Board Committee Charters.
Additionally, Braemar will terminate its contractual relationships with Premier Project Management LLC and Remington Lodging & Hospitality, LLC, both of which are subsidiaries of Ashford. Certain immaterial, short-term contracts will be retained with Inspire, Pure and RED Hospitality to avoid disrupting existing hotel operations.
The Company Sale Fee will be triggered under the Advisory Agreement with Ashford upon the closing of previously announced asset sales. Net sale proceeds from future asset sales, after working capital needs and other reserves, will be transferred to Ashford to pay down a portion or all of the Company Sale Fee.
The Company does not intend to sell all or substantially all of its assets, only the approximate number necessary to satisfy the Company's obligation to pay the Company Sale Fee and Master Agreement Termination Fee.
Advisors
Robert W. Baird & Co. Inc. acted as financial advisor, White & Case LLP acted as legal counsel, and Longacre Square Partners acted as strategy and communications advisor to the Company.
About Braemar Hotels & Resorts
Braemar Hotels & Resorts Inc. (NYSE: BHR) is a real estate investment trust (REIT) focused on the high-growth luxury hotel and resort sector. The Company targets high-performance luxury urban and resort properties, specializing in assets that generate revenue per available room (RevPAR) at least twice the U.S. national average. Its industry-leading portfolio features luxury properties across the United States and the U.S. territories in the Caribbean.
Forward-Looking Statements
Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the federal securities laws. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," or other similar words or expressions. Additionally, statements regarding the following subjects are forward-looking by their nature: the Company's ability to execute the management spin-out; the Company's business and investment strategy; anticipated or expected purchases, sales or dispositions of assets; the Company's projected operating results; completion of any pending transactions; the Company's ability to restructure existing property-level indebtedness; the Company's ability to secure additional financing to enable us to operate the Company's business; the Company's understanding of its competition; projected capital expenditures; and the impact of technology on the Company's operations and business. Such forward-looking statements are based on the Company's beliefs, assumptions, and expectations of the Company's future performance taking into account all information currently known to the Company. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to the Company. If a change occurs, the Company's business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in the Company's forward-looking statements. One should carefully consider this risk when making an investment decision concerning the Company's securities. These and other risk factors are more fully discussed in the Company's filings with the SEC.
The forward-looking statements included in this press release are only made as of the date of this press release. Investors should not place undue reliance on these forward-looking statements. The Company will not publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise except to the extent required by law.
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SOURCE Braemar Hotels & Resorts, Inc.