Ashford Hospitality Prime, Inc. has announced that it has entered into a definitive agreement to acquire the 266-room Ritz-Carlton Sarasota inÊSarasota, FloridaÊforÊ$171 millionÊ($643,000Êper key).Ê
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.Ê As part of the transaction, the seller has agreed to provide aÊ$5.5 millionÊincome 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 forÊ$9.7 millionÊthat is being entitled to residential development adjacent to the golf course.Ê The acquisition is expected to close in early April subject to customary closing conditions.Ê 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 growingÊSarasotaÊmarket,” saidÊRichard J. Stockton,ÊAshford Prime’sÊPresident and Chief Executive Officer.Ê “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 downtownÊSarasota, 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.ÊÊSarasota, located approximately 60 miles south ofÊTampa, is a popular and growing upscale, year-round destination on the west coast ofÊFlorida. ÊBeyond the first-class hotel experience, guests have easy access to theÊSarasotaÊarea’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.Ê The resort also offers an array of amenities, including a 26,000 sq. ft. Beach Club with 410 feet of beachfront, a private, luxuryÊTom 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.Ê The Property is in excellent physical condition after having received overÊ$21 millionÊin capital improvements during the past few years.Ê 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 Ð Reader’s Choice Award
- TravelandLeisure.com Ð America’s Best Beach Hotels
- Travel & Leisure’s Reader’s Survey Ð World’s Best Hotels
- Forbes Travel Guide Four-Star Award Ð The Ritz Carlton Spa
- Travel & Leisure Ð World’s Best Spas
- Zagat Ð America’s Top Golf Courses
The purchase price for the Ritz Sarasota represents, as ofÊDecember 31, 2017, a trailing 12-month capitalization rate of 6.0% on hotel net operating income ofÊ$10.2 millionÊand a trailing 12-month 12.8x Hotel EBITDA multiple, according to the Company’s preliminary estimates based on unauditedÊoperating financial data provided by the sellers.Ê The Company expects to realize a stabilized unleveraged yield of approximately 8% on its investment.Ê On a trailing 12-month basis as ofÊDecember 31, 2017, the Property achieved RevPAR ofÊ$284.38, with 78.1% occupancy and an average daily rate (ADR) ofÊ$364.04, according to unaudited operating financial data provided by the sellers.Ê 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.Ê The Ashford App is available for free download at Apple’sÊApp StoreÊand the Google Play Store by searching “Ashford.”
