"The governance here is just abysmal," one portfolio manager told Barron's. "Is anybody looking out for the shareholders?" By Bill Alpert

Monty Bennett's asset management firms have received $1.9 billion in payments from the two real estate investment trusts he runs, even as the REITs have lost most of their value.

The management companies now say they are entitled to another half-billion dollars if the more valuable of those REITs succeeds in selling a sufficient number of hotels.

Braemar Hotels & Resorts owns 13 trophy properties, including the Ritz-Carlton Lake Tahoe and the Four Seasons Resort Scottsdale, with some of the highest room rates in the industry. It has a market capitalization of $175 million. Bennett's other REIT, Ashford Hospitality Trust, owns over 60 good-quality hotels, but has a stock market value of $19 million. Both REITs are heavily indebted.

Under the 60-year-old Bennett's leadership, Ashford Hospitality shares are down 99.99% from their 2014 peak, while the FTSE Nareit Equity Lodging & Resort Index is down 18% in that time. Braemar shares have fallen over 90% since the company's 2013 debut, even though the REITs have made operating profits. Shareholder activists have tried unsuccessfully to loosen Bennett's control for a decade.

In August, Braemar's board put Braemar up for sale. Its agreements with Bennett's management company, Ashford Inc., and his other firms provide termination fees of $505 million. Investors say that makes the REIT's sale impossible.

"The problem is basically all the proceeds go to Monty," says Gene Pretti, a portfolio manager at Zazove Associates, which has owned Braemar's securities for several years. "The governance here is just abysmal. Is anybody looking out for the shareholders?"

The REIT's chairman doesn't apologize. "The terms of the advisory agreement -- including the termination fee -- have been disclosed to and approved by shareholders," Bennett said in a statement to Barron's. "Shareholders who acquired [Braemar] and [Ashford Hospitality] shares did so with full knowledge of their structure and its terms."

The inability of successive activists to budge Bennett stems from the management-friendly laws of Maryland, where most REITs are domiciled. Outside shareholders can't own more than 10% of a REIT. When shareholders declined to re-elect Bennett and the REITs' lead independent director to the companies' boards, the other directors reappointed them.

"The shareholders fire you, but no one cares," laments Alejandro Malbran, whose Brancous LP is the latest investment firm to try rallying Braemar shareholders against Bennett's management.

When activist shareholders have criticized Braemar's contract with Bennett, the REIT has sued them for violating securities laws and tortious interference. Braemar sued Malbran in Maryland's federal court in early March.

Says Malbran: "If I ever try to do this again, just shoot me."

Monty Bennett joined his father Archie's hotel business in 1989. Over the next few years, they teamed with investors including George Soros to become the largest buyers of hotel assets from the government-owned Resolution Trust Corp, as it liquidated mortgages from savings-and-loan failures. They brought their hotels public in 2003 as the Ashford Hospitality REIT. Ten years later, Ashford Hospitality spun out its best properties as a separate REIT, ultimately called Braemar.

Bennett set out to build an asset management empire around his REITs. In 2014, Ashford Hospitality spun off most of its real estate advisory operation as a New York Stock Exchange--listed company called Ashford Inc. Bennett was chief executive and controlling shareholder of the new firm, which likened itself to asset management giants like Blackstone and Starwood.

Ashford Inc. started off with decadeslong contracts as the outside advisor to both REITs. It has provided day-to-day hotel management, raised capital, and even operated motor boats for the hotels. In its dozen years as a reporting company, securities filings show that it received a cumulative $1.9 billion in payments from the REITs and reported $330 million in adjusted earnings before interest, taxes, and depreciation.

Bennett and his family did well under the arrangement. Since the 2013 spinoff of Braemar, Barron's calculates from proxy filings and annual reports that Bennett was awarded over $110 million in compensation pay, stock, and cash from the REITs and the Ashford management company, plus more than $70 million in declared dividends on his preferred shares. Bennett told Barron's that his compensation was "substantially lower," and that our calculation of his dividends is "absolutely wrong," but didn't provide any numbers. Ashford also acquired Bennett family businesses that provide daily management, design, and construction for the hotels, paying with stock worth $475 million at the time.

Ashford Inc. common stockholders fared less well. A hedge fund it launched in 2015, with $48 million from Braemar, wound down the next year after substantial losses. Ashford Inc. never became the big manager of outside assets that it aspired to be. By the time Bennett took Ashford Inc. private again in 2024 -- for $11 million -- its common shareholders had never had a profitable year after paying interest costs and preferred stock dividends.

While running the REITs and Ashford Inc., Bennett attracted local attention outside the businesses. In a six-year campaign to keep the Tarrant Regional Water District from running a pipeline across his 1,500-acre Lazy W Ranch in North Texas, Bennett moved a graveyard into its path, formed his own water district, and stocked his ranch with endangered species. He won.

When the Covid pandemic emptied hotels in 2020, the properties furloughed 90% of their workers. Bennett made national news when his REITs turned out to be one of the biggest participants in the government's small-business rescue effort, the Paycheck Protection Program. From a program whose average loans were around $200,000, the REITs sought approximately $126 million, as Sen. Chuck Schumer (D., N.Y.) complained in a letter to the U.S. Small Business Administration. After that publicity, Bennett's REITs returned the PPP funds.

Bennett has used his REIT earnings to support politicians and causes in Texas. Most recently, he helped pass amendments to the Dallas city charter that required the city to hire 900 additional police officers, put half of new tax dollars toward police and fire pensions, and waived the city's sovereign immunity from citizen suits.

When Barron's asked Bennett about the decline of Braemar's stock, he sent a statement blaming the REIT's troubles on government shutdowns during Covid and high interest rates set by the Federal Reserve.

"Government-mandated shutdowns effectively eliminated hotel revenue industrywide for an extended period," Bennett said. "Virtually every public hotel REIT saw dramatic declines in stock performance during and after the pandemic."

In 2017, Braemar and its shareholders approved the contract that will award Ashford the $505 million termination fee if Bennett loses control of the REIT.

Shareholders have challenged the related party contracts for a decade. When investor John Petry of Sessa Capital attempted a proxy contest in 2016, Braemar's proxy solicitor warned Petry that Monty Bennett would "rain down a path of destruction" on him, according to filings from a Dallas federal court suit in which Ashford sued Petry for $200 million on allegations that he was tortiously interfering with its advisory contract. Petry settled the suit. He didn't respond to Barron's queries.

In 2023, the investment firm Blackwells Capital, led by Jason Aintabi, offered to take Braemar private for $4.50 a share -- more than twice its then share price. Blackwells' financial analysis, disclosed in later litigation, estimated that Braemar's hotels could be worth $3.5 billion within five years. The analysis concluded that the REIT traded far below its net asset value because of what Aintabi referred to as a "Monty discount."

In the ensuing proxy battle, Aintabi found himself the subject of critical coverage by the publication Dallas Express, which Bennett had started in 2021 to remedy what he saw as liberal bias in local news reporting. The dispute settled in 2024, when Blackwells agreed to support Bennett's continued management and Braemar reimbursed Blackwells for $7 million in costs and gave the firm a below-market-rate loan to buy Braemar shares.

Blackwells and Aintabi didn't respond to queries from Barron's.

The Blackwells settlement disappointed other investors, including the billionaire Wafic Saïd, whose Al Shams Investment firm is Braemar's largest outside shareholder, with 9.5% of the stock. In a securities filing, Saïd attached a July 2024 email to Bennett, in which Saïd called the settlement a "payoff."

"The current state of Braemar looks dark," wrote Saïd in another email that appeared in a November 2024 securities filing. Braemar was diverting enormous resources to the advisory company of its board chairman, Bennett, the email continued. Saïd called on the REIT to appoint "truly independent" directors, end Bennett's management contract, and renegotiate its termination fee.

Other shareholders unhappy with the Ashford contracts included the family office of Bob Ghassemieh, Los Angeles real estate investors who had a 7.5% stake in Braemar after selling the REIT a hotel. When Ghassemieh complained about the contracts and Braemar's governance, the REIT put him on the board in August 2025.

Later that day, Braemar announced it was putting itself up for sale, with a $505 million termination fee payable to Ashford when it happens. In securities filings, Ghassemieh says he was blindsided by the announcement.

An earlier report by Deutsche Bank had projected a termination fee of $200 million, while Baird -- which has been Braemar's investment bank -- had projected $283 million.

Braemar kicked Ghassemieh off its board in February, saying that he had violated his standstill agreement with the company. Ghassemieh denied the claim and, in a letter to Braemar attached to a federal court filing, said Braemar had offered to sell Saïd a hotel in exchange for his shares when Saïd threatened a lawsuit.

With the $505 million termination fee hanging over any transaction, no acquisition deal has been announced in the six months since Braemar hung a "For Sale" sign. Knowledgeable people tell Barron's that some large real estate investors considered bidding, but concluded that Braemar shareholders wouldn't approve a deal that triggered the termination fee.

Securities filings show shareholder letters critiquing the termination fee from Zazove Associates and from Alejandro Malbran's investment firm, Brancous, which owns about 1% of Braemar stock.

On March 11, the REIT sued Malbran and Ghassemieh in a federal court in Maryland. Citing their criticism of Bennett's contract, the suit alleges that they violated securities laws by forming a "secret group" to interfere with Braemar's sale. Ghassemieh's motion to dismiss stated that Braemar produced no evidence that its critics collaborated.

Since the company sale didn't happen, Braemar is now taking bids on individual hotels -- with interest from some of the same firms that took a pass on the company last year, according to a person knowledgeable about the process. A December amendment to the advisory contract says that if half of Braemar's assets get sold, the termination payment still triggers.

Bennett tells Barron's that he's working hard for the REITs. "We remain focused on driving long-term value for shareholders," he says.

Write to Bill Alpert at william.alpert@barrons.com

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April 10, 2026 21:30 ET (01:30 GMT)

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