Host Hotels & Resorts, Inc. Acquires Hyatt Regency Austin
March 17 2021 - 8:30AM
Host Hotels & Resorts, Inc. (NASDAQ: HST) (the “Company”),
the nation’s largest lodging real estate investment trust (“REIT”),
today announced that it has acquired the fee simple interest in the
448-room Hyatt Regency Austin in Austin, Texas for approximately
$161 million in cash. The purchase price represents a 10.0%
capitalization rate and an 8.8x EBITDA multiple based on 2019
actual results(1) and reflects a 20-25% discount to pre COVID-19
pricing based on comparable publicly-disclosed hotel sales.(2)
Hyatt will continue to manage Hyatt Regency Austin under a
long-term management agreement.
James F. Risoleo, President and Chief Executive
Officer, said, “We are excited to have executed an off-market,
opportunistic acquisition of a high-quality hotel in one of the
nation’s fastest growing cities, which continues to be a top
beneficiary of corporate and people relocation. As travel resumes,
we expect the well-located Hyatt Regency Austin to benefit from a
strong rebound led by Austin’s multiple leisure and business demand
drivers that are anchored in world-renowned music festivals,
sporting events and blue-chip corporations. Additionally, we are
encouraged by the reported contraction in Austin’s hotel
construction pipeline relative to pre-pandemic levels and by the
market’s significantly lower hotel operating costs compared to
other markets. We expect this acquisition to raise our EBITDA
growth profile, while positively enhancing our geographic
diversification by adding a market with a thriving economy and a
young and vibrant population.”
Risoleo continued, “Our long-standing
relationships and ability to execute quickly and with existing
liquidity, provided us the opportunity to acquire this hotel ahead
of a planned foreclosure auction at a very attractive yield based
on 2019 performance. Our goal is for the Hyatt Regency Austin to
exceed 2019 levels of revenues and EBITDA on a stabilized basis as
Hyatt leverages Host’s data-driven asset management and enterprise
analytics platforms to drive incremental expense reductions and
productivity improvements at the hotel.”
Situated on nearly six acres in a park-like
setting along Lady Bird Lake, this waterfront hotel commands scenic
views and is near the vibrant South Congress District with easy
access to numerous leisure attractions, including the South
Congress entertainment area, Zilker Park, and the Colorado River
which offers recreational water activities.
The 670,000 square-foot property had a rooms
renovation in 2015 and a meeting space expansion in 2015 and
renovation in 2018. The hotel offers 45,000 square feet of total
meeting space (including ballrooms of 14,000 and 10,000 square
feet), two food and beverage outlets, an outdoor pool, and a
fitness center.
For additional information on the acquisition
and the Company’s February 2021 preliminary topline results, please
refer to the Hyatt Regency Austin investor presentation located in
the investor presentation section of the Company’s website.
About Host Hotels &
Resorts
Host Hotels & Resorts, Inc. is an
S&P 500 company and is the largest lodging real estate
investment trust and one of the largest owners of luxury and
upper-upscale hotels. The Company currently owns 76 properties in
the United States and five properties internationally totaling
approximately 46,800 rooms. The Company also holds non-controlling
interests in six domestic and one international joint ventures.
1) The purchase price equates to a multiple of
11.8x and a capitalization rate of 8.5% based on 2019 pro forma
GAAP net income. Pro forma net income includes depreciation expense
of $5 million, which is excluded from EBITDA and net operating
income. The pro forma adjustment to net income is to account for
Host’s ownership, which results in a different 2019 depreciation
expense.2) Based on the sales of three comparable hotels in Austin
between 2014 and 2019.
SOURAV GHOSH |
TEJAL ENGMAN |
Chief Financial Officer |
Investor Relations |
(240) 744-5267 |
(240) 744-5116 |
|
ir@hosthotels.com |
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