DALLAS, Feb. 16, 2018 /PRNewswire/ --
Acquisition Highlights:
- Luxury resort in Sarasota,
Florida with waterfront location on Sarasota Bay
- Exceptional amenities including a Beach Club with 410 feet of
beachfront as well as a Tom Fazio
designed golf course
- Revenue per available room (RevPAR) of $284.38 for the 12 months ended December 31, 2017
- Property is in excellent physical condition with limited capex
needs
Ashford Hospitality Prime, Inc. (NYSE: AHP) ("Ashford Prime" or the "Company") today announced
that it has entered into a definitive agreement to acquire the
266-room Ritz-Carlton Sarasota in Sarasota, Florida (the "Ritz Sarasota" or the
"Property") for $171 million
($643,000 per key). To fund the
acquisition, the Company plans to use cash on its balance sheet as
well as either drawing on its revolving credit line or securing a
non-recourse mortgage loan on the property. As part of the
transaction, the seller has agreed to provide a $5.5 million income guaranty to cover any
decrease from 2017 hotel gross operating profit for up to three
years, subject to certain conditions. In addition, the
Company is also acquiring a 22 acre plot of vacant land for
$9.7 million that is being entitled
for residential development adjacent to the golf course. The
acquisition is expected to close in early April subject to
customary closing conditions. Because the acquisition is
subject to customary closing conditions, the Company can give no
assurance that the transaction will be consummated by such date or
at all.
"The acquisition of the Ritz-Carlton Sarasota is an opportunity
for us to acquire a luxury resort property with a premier location
in the upscale and growing Sarasota market," said Richard J. Stockton, Ashford Prime's President and Chief Executive
Officer. "This property fits perfectly with our strategy of
owning luxury hotels and resorts and further diversifies our
portfolio while also increasing the overall RevPAR of our
portfolio, which is already the highest among our hotel REIT
peers."
Located on Sarasota Bay in downtown Sarasota, the Property, with its premier
location, luxury brand affiliation and world-class amenities, is
positioned as the leading resort in one of country's fastest
growing markets. Sarasota,
located approximately 60 miles south of Tampa, is a popular and growing upscale,
year-round destination on the west coast of Florida. Beyond the first-class hotel
experience, guests have easy access to the Sarasota area's many amenities and activities,
including exceptional dining and shops, art galleries, beaches,
museums, boating, fishing, and golfing.
The Ritz-Carlton Sarasota was built in 2001 and has 266
luxurious and spacious rooms, including 31 suites. The resort
also offers an array of amenities, including a 26,000 sq. ft. Beach
Club with 410 feet of beachfront, a private, luxury Tom Fazio-designed Golf Club, the award-winning
15,000 sq. ft. Ritz-Carlton Spa Club, eight food and beverage
outlets, including the acclaimed Jack Dusty waterfront restaurant,
29,000 sq. ft. of flexible indoor meeting space, two outdoor pools,
24-hour state-of-the-art fitness club, lighted tennis courts and
the Ritz Kids Club. The Property is in excellent physical
condition after having received over $21
million in capital improvements during the past few
years. Post-closing, the property will continue to be managed
by Ritz-Carlton.
In addition, the Ritz Sarasota has been the recipient of the
following awards:
- AAA Five Diamond Lodging Award
- Forbes Travel Guide Four-Star Award - Hotel
- Conde Nast Traveler – Reader's Choice Award
- TravelandLeisure.com – America's Best Beach Hotels
- Travel & Leisure's Reader's Survey – World's Best
Hotels
- Forbes Travel Guide Four-Star Award – The Ritz Carlton Spa
- Travel & Leisure – World's Best Spas
- Zagat – America's Top Golf Courses
The purchase price for the Ritz Sarasota represents, as of
December 31, 2017, a trailing
12-month capitalization rate of 6.0% on hotel net operating income
of $10.2 million and a trailing
12-month 12.8x Hotel EBITDA multiple, according to the Company's
preliminary estimates based on unaudited operating financial
data provided by the sellers. The Company expects to realize
a stabilized unleveraged yield of approximately 8% on its
investment. On a trailing 12-month basis as of December 31, 2017, the Property achieved RevPAR
of $284.38, with 78.1% occupancy and
an average daily rate (ADR) of $364.04, according to unaudited operating
financial data provided by the sellers. A reconciliation of
non-GAAP financial measures is included in the financial table
below.
Ashford Hospitality Prime is a real estate investment trust
(REIT) focused on investing in luxury hotels and resorts.
Ashford has created an Ashford App for the hospitality REIT
investor community. The Ashford App is available for free
download at Apple's App Store and
the Google Play Store by searching "Ashford."
Ashford
Hospitality Prime
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Ritz-Carlton
Sarasota
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Reconciliation of
Hotel Net Income to Hotel EBITDA and Hotel Net Operating
Income
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(Unaudited, in
millions)
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12
Months
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Ended December
31,
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2017
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Hotel Net
Income
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$
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4.4
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Adjustment:
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Depreciation and
amortization
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$
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7.4
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Interest
expense
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$
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1.5
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Hotel
EBITDA
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$
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13.3
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Adjustment:
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Capital
reserve
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$
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(3.1)
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Hotel Net Operating
Income
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$
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10.2
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(1) All
information in this table is based upon unaudited operating
financial data provided by the seller for the year ended December
31, 2017. Financial statements for the property have not been
prepared for the year ended December 31, 2017, and this data has
not been audited, reviewed or compiled by the Company's independent
registered public accounting firm, and therefore the financial
information presented will likely change.
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EBITDA is defined as net income (loss), computed in
accordance with generally accepted accounting principles ("GAAP"),
before interest, taxes, depreciation and amortization. Hotel
EBITDA multiple is defined as the purchase price divided by the
trailing 12 month EBITDA. A capitalization rate is determined
by dividing the property's annual net operating income by the
purchase price. Net operating income is the property's hotel
EBITDA minus a capital expense reserve of either 4% or 5% of gross
revenues.
Certain statements and assumptions in this press release
contain or are based upon "forward-looking" information and are
being made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements in this press release include, among others, statements
about the closing of the acquisition of the Ritz-Carlton Sarasota
and the potential related property-level financing.
These forward-looking statements are subject to risks and
uncertainties. When we use the words "will likely result,"
"may," "anticipate," "estimate," "should," "expect," "believe,"
"intend," or similar expressions, we intend to identify
forward-looking statements. Such statements are subject to
numerous assumptions and uncertainties, many of which are outside
Ashford Prime's control. These
forward-looking statements are subject to known and unknown risks
and uncertainties, which could cause actual results to differ
materially from those anticipated, including, without
limitation: general volatility of the capital markets and the
market price of our common stock; changes in our business or
investment strategy; availability, terms and deployment of capital;
availability of qualified personnel; changes in our industry and
the market in which we operate, interest rates or the general
economy; our ability to successfully complete and integrate
acquisitions, and manage our planned growth, and the degree and
nature of our competition. These and other risk factors are
more fully discussed in Ashford
Prime's filings with the Securities and Exchange
Commission. The forward-looking statements included in this
press release are only made as of the date of this press
release. Investors should not place undue reliance on these
forward-looking statements. We are not obligated to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or circumstances, changes
in expectations or otherwise.
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SOURCE Ashford Hospitality Prime, Inc.