Host Hotels & Resorts acquires The Alida, Savannah and

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BETHESDA, Md., December 20, 2021 (GLOBE NEWSWIRE) – Host Hotels & Resorts, Inc. (NASDAQ: HST), the nation’s largest real estate investment trust (the “Company”), today announced that it has acquired the fee simple interest in The Alida, Savannah, a 173-room boutique hotel, for approximately $ 103 million in cash.

This newly built hotel opened in October 2018 and enjoys a soft branding in Marriott’s Tribute portfolio. Rooms average 371 square feet with high ceilings, hardwood floors, built-in window seats, and marble bathrooms. The hotel offers 11,570 square feet of meeting space (5,170 indoor), four F&B outlets including a rooftop bar with panoramic views, an outdoor pool, and a street-front retail space.

Stabilization of Alida is expected by 2024-2025 at around 11-12 times EBITDA1 with a RevPAR of around $ 240. The property’s stabilized EBITDA is in line with the company’s estimate of Normalized Operations for 2019, which adjusts for construction disruptions in the surrounding Plant Riverside area and the initial ramp-up of hotel operations.

The Alida is located in Historic Savannah, just one block from the Savannah River, right next to a new entertainment district, including the Plant Riverside District. A strong tourism industry has contributed to favorable market dynamics in recent years – 2019 marked 10 consecutive years of record visits, nine consecutive years of record visitor spending and a five-year RevPAR CAGR over 100 points higher. base to that of the United States. We anticipate that future growth will be supported by multiple drivers of leisure demand, including the fact that Savannah is a must-see leisure destination for the fast-growing food markets of the Southeast and that air traffic via the Savannah / Hilton Head International Airport is increasing. The hotel is also benefiting from the group’s internal and external demand, which is expected to be boosted by the $ 271 million expansion of the convention center which is expected to be completed in 2024.

In addition to the Alida acquisition, the company also announced that it had sold the 305-room W Hollywood leasehold interest for a total sale price of approximately $ 197 million, of which $ 3 million was dollars for FF&E replacement funds. The sale price represents an EBITDA multiple of 25.0x2 on 2019 EBITDA, including approximately $ 33 million of estimated ceded capital expenditures over the next five years.

James F. Risoleo, President and CEO, said, “We are delighted to further diversify our portfolio with the acquisition of The Alida, Savannah. The hotel is as new with no planned short term investment in a market with favorable operating costs, multiple demand drivers and a history of strong RevPAR growth as the sale of W Hollywood reduces our exposure to leases land tenure and avoids the need for large capital investment and associated disruptions. We continue to be very active on the capital allocation front as we target new markets. Since the start of the year, we have invested $ 1.3 billion in early-cycle acquisitions. The mixed EBITDA multiple on our six hotel acquisitions in 2021 is 12.9x3, which compares favorably to the nearly $ 750 million generated by our six hotel disposals at a rate of 16.0 times2 Multiple of EBITDA, including ceded capital expenditure.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is an S&P 500 company and is the largest accommodation real estate investment trust and one of the largest owners of luxury and upscale hotels. The Company currently owns 75 properties in the United States and five properties internationally totaling approximately 45,300 rooms. The Company also has non-controlling interests in six domestic joint ventures and one international joint venture.

FORWARD-LOOKING STATEMENTS

Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by the use of terms and expressions such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may “,” Should “,” plan, “” plan “,” project “,” will “,” continue “and other similar terms and expressions, 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 that may cause actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include , not limited to: the duration and extent of the COVID-19 pandemic and its short- and long-term impact on travel demand, passenger and group business, and consumer confidence levels ; measures taken by governments ents, businesses and individuals in response to the pandemic, including limiting or banning travel; the impact of the pandemic and the measures taken in response to the pandemic on global and regional economies, travel and economic activity, including the duration and magnitude of its impact on unemployment rates, investments by business and consumer discretionary spending; the pace of recovery as the COVID-19 pandemic subsides; general economic uncertainty in the US markets where we own hotels and deteriorating economic conditions or low levels of economic growth in these markets; other changes (aside from the COVID-19 pandemic) in national and local economic and business conditions and other factors such as natural disasters and weather conditions that will affect our hotel occupancy rates and demand for hotel products and services; the impact of geopolitical developments outside the United States on accommodation demand; the volatility of global financial and credit markets; operating risks associated with the hotel business; the risks and limitations of our operational flexibility associated with the level of our indebtedness and our ability to meet the covenants of 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 occupancy rate and financial results; our ability to compete effectively in areas such as access, location, quality of accommodation and room rate structures; the risks associated with our ability to complete acquisitions and divestitures and to develop new properties and the risks that acquisitions and new developments may not meet our expectations; our ability to continue to meet complex rules so that we can remain a real estate investment trust for federal income tax purposes; 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 that the expectations reflected in these forward-looking statements are based on reasonable assumptions, it cannot guarantee that the expectations will be met or that any difference will not be material. All information in this press release is as of the date of this press release and the company assumes no obligation to update any forward-looking statement to conform with the statement to actual results or to changes in the company’s expectations.

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1
In accordance with industry practice, we calculate the multiple of EBITDA as the ratio of the purchase price to the EBITDA of the property. EBITDA is a non-GAAP measure. The GAAP measure comparable to the multiple of EBITDA is the ratio of purchase price to net income. The ratio of the purchase price to the stabilized net profit of The Alida, Savannah, which is expected to occur in the period 2024-2025, is 18.2x based on an expected stabilized net profit of 6 million of dollars. The difference between net income and EBITDA corresponds to an amortization charge of $ 3 million. The stabilized results are given for information only. Our ability to achieve 2024-2025 results is subject to various uncertainties and actual results may differ materially.
2 Disposal multiples are calculated as the ratio between the sale price (plus estimated avoided investments) and 2019 EBITDA. The ratio between the purchase price and 2019 W Hollywood net income is 142x. W Hollywood 2019 net income is $ 1 million and the difference between net income and EBITDA is an amortization charge of $ 8 million. The purchase price-to-net income ratio for the 2021 combined divestitures is 27x and the estimated avoided capital expenditures over the five years after the divestiture date totaled $ 155 million. Combined net income from the 2021 disposals is $ 27 million and the difference between net income and EBITDA is amortization expense of $ 29 million.
3 The mixed EBITDA multiple is based on the 2019 operations for the Hyatt Regency Austin and the Four Seasons Resort Orlando at Walt Disney World® Resort and on the 2021 forecast during the acquisition for Baker’s Cay Resort and Alila Ventana Big Sur as these hotels experienced renovation interruptions and closures in 2019. Estimated standard operations for 2019 were used for Hotel Laura, assuming a new manager and brand, and for Alida, Savannah , taking into account construction disruptions in the surrounding Plant Riverside neighborhood and the initial ramp-up of hotel operations. The blended ratio of purchase price to net income for the 2021 acquisitions is 20.8x, using net income of $ 62 million. The difference between combined net income and EBITDA is an amortization charge of $ 38 million. Additionally, EBITDA includes an adjustment of $ 13 million to reflect normalized operations for both The Laura Hotel and The Alida, Savannah.

SURAV GHOSH
Financial director
(240) 744-5267
Jaime MARCUS
Investor Relations
(240) 744-5117
[email protected]

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