Braemar Hotels & Resorts Inc. (NYSE: BHR) today announced it has entered into a definitive agreement to acquire the 210-room Four Seasons Resort Scottsdale at Troon North. The acquisition is expected to close in the fourth quarter, subject to certain customary closing conditions. Because the acquisition is subject to certain 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 Four Seasons Resort Scottsdale is an exciting opportunity for us to acquire a timeless, luxury resort ideally located in picturesque North Scottsdale," said Richard J. Stockton, Braemar's President and Chief Executive Officer. "This exquisite Property fits perfectly with our strategy of owning high RevPAR luxury hotels and resorts and further diversifies our portfolio."
Located on East Crescent Moon Drive in Scottsdale, Arizona, the idyllic Property is set on 37 acres featuring adobe-inspired rooms situated among saguaro cacti, dramatic valleys, and views of the iconic Pinnacle Peak. Amenities include locally inspired spa treatments at the 9,000 sq. ft. spa, a bi-level pool and authentic Southwest cuisine. The Property also offers guests opportunities for outdoor adventure, including close shuttle access to two world-class golf courses, four pickleball and two tennis courts, as well as the opportunities to hike, bike or rock climb surrounding hills. In addition to the amenities of the self-contained Property, the resort benefits from its close proximity to the city of Scottsdale, known for its shopping boutiques, award winning restaurants, Old West history, Native American art, and being among the world's finest golf destinations.
Four Seasons Resort Scottsdale at Troon North has been the recipient of the following awards:
- AAA Five Diamond Winner 2022
- Forbes Four Star Travel Award Winner 2022
- World Travel Awards United States' Leading Resort 2022
- World Travel Awards Arizona's Leading Resort 2022
The total consideration for the acquisition is $267.8 million ($1.28 million per key). The acquisition is expected to be funded with existing cash on hand. No common equity will be issued to fund the acquisition. Of the total consideration, $250 million is allocated to the existing resort and represents a capitalization rate of 5.7% on hotel net operating income of $14.2 million and a 15.2x hotel EBITDA multiple, based on unaudited operating financial data provided by the sellers and forecasted financial results for 2022. The Company expects to realize a stabilized yield of approximately 8.0% on its investment in the next three to five years. On a trailing 12-month basis as of August 30, 2022, the Property achieved RevPAR of $423.20, with 48.5% occupancy and an average daily rate (ADR) of $873.24, according to unaudited operating financial data provided by the seller.
Braemar Hotels & Resorts is a real estate investment trust (REIT) focused on investing in luxury hotels and resorts.
|
Braemar Hotels & Resorts Inc. |
||
|
Four Seasons Resort Scottsdale at Troon North |
||
|
Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income |
||
|
(Unaudited, in millions) |
||
|
12 Months Ending |
||
|
December 31, 2022 |
||
|
Net income (loss) |
$ 4.0 |
|
|
Interest expense |
4.3 |
|
|
Depreciation and amortization |
8.2 |
|
|
Hotel EBITDA |
$ 16.5 |
|
|
Capital reserve |
(2.3) |
|
|
Hotel Net Operating Income |
$ 14.2 |
|