Host Hotels & Resorts, Inc. Acquires Baker’s Cay Resort Key Largo for $200 Million
July 06 2021 - 8:00AM
Host Hotels & Resorts, Inc. (NASDAQ: HST), the nation's
largest lodging real estate investment trust (the "Company"), today
announced that it has acquired the fee simple interest in the
200-room Baker’s Cay Resort Key Largo, Curio Collection for
approximately $200 million in cash. The purchase price represents
an estimated 6.2% capitalization rate and a 14.5x EBITDA multiple
based on 2021 property forecasts.(1)
James F. Risoleo, President and Chief Executive
Officer, said, “We are pleased to announce the off-market
acquisition of our first hotel in the Florida Keys which we believe
will improve the EBITDA growth profile of our portfolio. After a
complete $63 million renovation and repositioning in 2019, Baker’s
Cay shows like a new resort. Additionally, the Florida Keys market
benefits from excellent supply-demand dynamics owing in part to
strict development ordinances which have led to the highest 2019
upper-upscale RevPAR of any market in the US. We expect this resort
to deliver over $300 of RevPAR and $69,000 of EBITDA per key(1) in
2021, ranking eighth on both metrics in Host’s 2019 pro forma
portfolio.”
Risoleo continued, “As a result of our prudent
capital allocation decisions over the past few years, our strong
balance sheet, and our deep relationships in the industry, we were
able to acquire another off-market, high-quality hotel in the
sunbelt. This transaction brings our total hotel acquisitions so
far in 2021 to nearly $1 billion with a blended 14.3x estimated
EBITDA multiple.”(2)
Situated on 13 acres of irreplaceable beachfront
land on Key Largo’s Gulf Coast, the property provides guests with
the benefits of a Florida Keys resort in a location just 65 miles
from Miami International Airport. The property offers 26,000 square
feet of meeting space, including a 6,900 square foot event lawn and
four food and beverage outlets. Amenities include a swimmable
private beach, spa, salon, dock, fitness center, and two outdoor
pools.
For additional information on the acquisition
and the Company’s May 2021 preliminary topline results, please
refer to the Baker’s Cay Resort Key Largo 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 78 properties in
the United States and five properties internationally totaling
approximately 47,400 rooms. The Company also holds non-controlling
interests in six domestic and one international joint venture.
(1) Consistent with industry practice, we
calculate the capitalization rate as the ratio of property’s net
operating income to its purchase price and the EBITDA multiple
as the ratio of the purchase price to the property’s EBITDA. Both
net operating income and EBITDA are non-GAAP measures. The
comparable GAAP metric to capitalization rate utilizing 2021E net
income is the ratio of net income to the purchase price of 4.4%.
The comparable GAAP metric to EBITDA multiple is 2021E ratio of the
purchase price to net income (net income multiple) of 23x. 2021E
net income per key is $43,000. The property’s 2021E net income is
$8.7 million and the difference between net income and EBITDA is
depreciation expense of $5.1 million. The difference between EBITDA
and net operating income is $1.4 million for the annual contractual
reserve requirements for renewal and replacement expenditures.
These are calculated on a pro forma basis to account for Host’s
ownership. Our ability to achieve these results is subject to
various uncertainties and actual results may be materially
different.(2) The acquisition multiple is based on 2019 operations
except for Baker's Cay, which is based on 2021 forecast operations,
as the property was under renovation and closed for part of 2019.
The acquisition estimated net income multiple is 24x. Net income
for the acquisitions is $42.5 million and the difference between
net income and EBITDA is depreciation expense of $27.3 million.
SOURAV GHOSHChief Financial Officer(240)
744-5267
JAIME MARCUS Investor Relations(240)
744-5117ir@hosthotels.com
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