Host Hotels & Resorts, Inc. (NYSE: HST), the nation’s largest
lodging real estate investment trust (the “Company”), today
announced that on February 14, 2019, it acquired the fee simple
interest in the 429-room 1 Hotel South Beach in Miami Beach,
Florida for approximately $610 million.
This iconic and irreplaceable luxury resort
reopened in 2015 following a transformational $300 million
repositioning renovation and is rated in the top-10 U.S. hotels by
Conde Nast Traveler and recently rated the #1 hotel in Miami Beach
by TripAdvisor.
Based on the 2019 budget, the purchase price
equates to an EBITDA multiple of 13x.(1)
The 1.1 million square foot, LEED-certified
resort has a premium location in the vibrant South Beach area of
Miami Beach and over 600 linear feet of ocean frontage with direct
beach access. The resort is the centerpiece of a mixed-use complex
that features an additional 155 luxury branded 1 Homes condominium
units; all owners of these units may participate in a rental
program through the resort.
1 Hotel South Beach features 160,000 square feet
of dynamic and flexible meeting space, eight food and beverage
outlets, spa, gym, four elevated pools with ocean views and 23,000
square feet of luxury retail space.
James F. Risoleo, President and Chief Executive
Officer, said, “This is an extraordinary resort of an iconic and
irreplaceable nature located on prime, beachfront real estate in
the South Beach area of Miami Beach. The hotel has no
near-term capex needs and carries a RevPAR of over $488, making it
one of the top three in our portfolio. Our ability to convert
high EBITDA multiple asset sales of non-core, high-capex and
profitability challenged hotels into a resort of this caliber,
materially improving our overall portfolio, is an excellent example
of disciplined and prudent capital recycling.”
The aggregate consideration of approximately
$610 million includes the issuance of Class A Common Units of Host
Hotels & Resorts, L.P. with an aggregate value of approximately
$2.6 million and Class G Preferred Units with an aggregate value of
approximately $23.4 million.
(1) The purchase price equates to a multiple of
20x 2019 budgeted GAAP net income. The difference between budgeted
net income and EBITDA is depreciation expense of $16 million.
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 88 properties
in the United States and five properties internationally totaling
approximately 52,000 rooms. The Company also holds non-controlling
interests in six domestic and one international joint ventures.
Guided by a disciplined approach to capital allocation and
aggressive asset management, the Company partners with premium
brands such as Marriott®, Ritz-Carlton®, Westin®, Sheraton®, W®,
St. Regis®, The Luxury Collection®, Hyatt®, Fairmont®, Hilton®,
Swissôtel®, ibis® and Novotel®, as well as independent brands in
the operation of properties in over 50 major markets. For
additional information, please visit the Company’s website at
www.hosthotels.com.
About 1
Hotels:
As a luxury lifestyle hotel brand inspired by
nature, 1 Hotels cultivates the best of sustainable design and
architecture, together with extraordinary comfort and an unrivaled
level of service. 1 Hotels, which launched in 2015 with the opening
of exclusive properties in Miami’s South Beach and Manhattan’s
Central Park, followed by Brooklyn, located on Pier 1, in February
2017, is inspired by a simple idea: those who travel the world also
care about it. 1 Hotels upholds this vision by channeling nature
through design and culinary partnerships, while connecting with the
local community and taking sustainable steps to make a big
difference. Additional information can be found at
www.1hotels.com.
About SH Hotels &
Resorts:
SH Hotels & Resorts, an affiliate of global
private investment firm Starwood Capital Group, is a hotel brand
management company that operates 1 Hotels, a nature-inspired
lifestyle brand that launched in 2015 with properties in South
Beach and Manhattan; and Baccarat Hotels & Resorts, a luxury
brand that made its debut in March 2015 with the opening of its
flagship property in New York, with projects under development in
Doha and Bordeaux. Leveraging its marketing, design, operational
and technological expertise, SH Hotels & Resorts is the force
behind some of the most groundbreaking and dynamic hotel brands in
the world. Additional information can be found at
www.shhotelsandresorts.com.
Note: This press release contains
forward-looking statements within the meaning of federal securities
regulations. These forward-looking statements include forecast
results and are identified by their use of terms and phrases such
as “anticipate,” “believe,” “could,” “estimate,” “expect,”
“intend,” “may,” “should,” “plan,” “predict,” “project,” “will,”
“continue” and other similar terms and phrases, including
references to assumptions and forecasts of future results.
Forward-looking statements are not guarantees of future performance
and involve known and unknown risks, uncertainties and other
factors which may cause the actual results to differ materially
from those anticipated at the time the forward-looking statements
are made. These risks include, but are not limited to: changes in
national and local economic and business conditions and other
factors such as natural disasters, pandemics and weather that will
affect occupancy rates at our hotels and the demand for hotel
products and services; the impact of geopolitical developments
outside the U.S. on lodging demand; volatility in global financial
and credit markets; operating risks associated with the hotel
business; risks and limitations in our operating flexibility
associated with the level of our indebtedness and our ability to
meet covenants in our debt agreements; risks associated with our
relationships with property managers and joint venture partners;
our ability to maintain our properties in a first-class manner,
including meeting capital expenditure requirements; the effects of
hotel renovations on our hotel occupancy and financial results; our
ability to compete effectively in areas such as access, location,
quality of accommodations and room rate structures; risks
associated with our ability to complete acquisitions and
dispositions and develop new properties and the risks that
acquisitions and new developments may not perform in accordance
with our expectations; our ability to continue to satisfy complex
rules in order for us to remain a REIT for federal income tax
purposes; risks associated with our ability to effectuate our
dividend policy, including factors such as operating results and
the economic outlook influencing our board’s decision whether to
pay further dividends at levels previously disclosed or to use
available cash to make special dividends; and other risks and
uncertainties associated with our business described in the
Company’s annual report on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K filed with the SEC. Although
the Company believes the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
it can give no assurance that the expectations will be attained or
that any deviation will not be material. All information in this
release is as of February 19, 2019, and the Company undertakes
no obligation to update any forward-looking statement to conform
the statement to actual results or changes in the Company’s
expectations.
* This press
release contains registered trademarks that are the exclusive
property of their respective owners. None of the owners of these
trademarks has any responsibility or liability for any information
contained in this press release.
Gee LingbergSenior Vice President240.744.5275
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