Braemar’s Planned $120M Buy, Plus More Acquisitions

NATIONAL REPORT—Who’s buying and selling? Here’s a look at the latest deals:

Braemar Hotels & Resorts Agrees to Acquire The Ritz-Carlton Lake Tahoe

Braemar Hotels & Resorts Inc. has entered into a definitive agreement to acquire the 170-room Ritz-Carlton Lake Tahoe in Truckee, CA. In addition, the company is also acquiring a 3.4-acre plot of vacant land adjacent to the hotel that is being entitled for luxury residential townhome development. The acquisition is expected to close on or prior to Jan. 15, 2019, but in no event earlier than Dec. 12, 2018, subject to customary closing conditions.

The total consideration for the acquisition is $120 million and consists of $103.4 million for the hotel ($608,000 per key); $8.4 million for the adjacent development parcel; and $8.2 million for Capital Reserves.  The purchase price for the Ritz Tahoe represents, as of Sept. 30, 2018, a trailing 12-month capitalization rate of 5.8% on hotel net operating income of $6.0 million and a trailing 12-month 13.5x 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 yield of approximately 8.5% on its investment. On a trailing 12-month basis as of Sept. 30, 2018, the property achieved RevPAR of $372.35, with 67% occupancy and an average daily rate (ADR) of $556.51, according to unaudited operating financial data provided by the sellers.

“The acquisition of the Ritz-Carlton Lake Tahoe is an opportunity for us to acquire an iconic and irreplaceable luxury resort property with a premier location on the Northstar ski mountain in the world-famous Lake Tahoe area,” said Richard J. Stockton, Braemar’s president/CEO. “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. This will be the third Ritz-Carlton in our portfolio, and with the strong market fundamentals in the Northern California area, along with our proven ability to work with Ritz-Carlton to maximize property level performance, we are excited about the future prospects for this iconic property.”

Located in the North Lake Tahoe area, the property is situated mid-mountain at the Northstar Ski Area. The Ritz Tahoe was built in 2009 and has 170 rooms, including 17 suites. The resort also offers an array of amenities, including ski-in/ski-out access to Northstar Ski Mountain, an ultra-luxury Lake Club on the shore of Lake Tahoe, a 17,000-sq.-ft. full-service spa, six food and beverage outlets, more than 37,000 sq. ft. of flexible indoor/outdoor meeting space, two outdoor pools, state-of-the-art fitness club and yoga studio, and the Ritz Kids Club.  According to the company, the property is in excellent physical condition after having over $18 million spent for capital improvements during the past few years. Post-closing, the property will continue to be managed by Ritz-Carlton.

Chartwell Hospitality Finalizes Purchase of Franklin Marriott Cool Springs

Chartwell Hospitality LLC, an integrated hotel operations and development company, recently finalized its purchase of the Franklin Marriott Cool Springs in Franklin, TN.

In addition to the full-service Marriott, Chartwell will also manage the 30,000-sq.-ft. Cool Springs Conference Center, which is connected to the hotel and is co-owned by the City of Franklin and Williamson County.

“This purchase illustrates our long-standing commitment to the Franklin-Williamson County area, and we are thrilled to announce this substantial addition to our growing portfolio of hotels,” said Chartwell’s Founder and President Rob Schaedle.

Each of the recently renovated Franklin Marriott Cool Springs’ 300 guestrooms reflects the brand’s modern aesthetic by merging form and function and emphasizing chic interior architecture, according to the company. Guestrooms feature the latest in guest-room design and advanced technology, including Smart TVs outfitted with Netflix and Hulu.

The hotel also offers nearly 30,000 sq. ft. of flexible event space, collaborative planning space, a ballroom and a private landscaped terrace. Guests and visitors can dine at Stave Regional Kitchen and Lounge, the hotel’s on-site restaurant, featuring farm-to-table comfort food sourced directly from Tennessee, including herbs and produce from the restaurant’s garden and honey from its own rooftop beehives.

HREC Arranges Sale of Gainey Suites Hotel in Scottsdale, AZ

HREC Investment Advisors has arranged the sale of the 164-room, all-suites, Gainey Suites Hotel located in Scottsdale, AZ. Hospitality Property Trust acquired the property and rebranded the hotel as the Sonesta Suites Scottsdale Gainey Ranch.

HREC Investment Advisors exclusively represented Gainey Hotel Co LLC during the transaction. The sale was negotiated by Bill Murney, managing director in the Phoenix office.

“Ownership built the hotel in 1999, and after $7 million in upgrades over the last three years, the completely renovated hotel in the heart of Scottsdale offered investors a unique acquisition opportunity, while allowing ownership to monetize their investment,” stated Murney.

The Gainey Suites Hotel is located just off Scottsdale Rd. squarely between Old Town Scottsdale and Kirkland Commons and Scottsdale Quarter, close to a variety of leisure attractions, including casinos, spas, shopping centers, MLB Spring Training facilities and numerous golf venues. Additionally, the immediate vicinity of the Gainey Suites is also home to millions of sq. ft. of office space, most notably Scottsdale Airport, which is the valley’s second largest employment center.

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