Host Hotels & Resorts Acquires Hotel Van Zandt and Disposes

BETHESDA, Md., Feb. 02, 2022 (GLOBE NEWSWIRE) — Host Hotels & Resorts, Inc. (NASDAQ: HST), the nation’s largest lodging actual property funding belief (the “Company”), right this moment introduced that it has acquired the charge easy curiosity within the Hotel Van Zandt, a 319-room luxurious life-style resort in Austin, Texas for a purchase order value of roughly $246 million together with its $4 million FF&E reserve. The internet acquisition value of roughly $242 million represents a 13.2x a number of on 2019 EBITDA¹ and stabilization is predicted within the 2025-2027 timeframe at roughly 10-12x EBITDA¹.

The Company funded the acquisition with roughly $140 million in proceeds from latest tendencies, and it assumed roughly $101.5 million of current secured debt. The debt matures in 2027, and the rate of interest is fastened at an annual charge of 4.67%.

This just lately constructed resort opened in 2015 with rooms that vary in measurement from 330 to 1,100 sq. ft, together with 52 suites. The resort provides 13,000 sq. ft of indoor assembly house and three F&B shops together with a rooftop pool bar and a full-service restaurant with a stage and nightly stay music.

Hotel Van Zandt is well-located in Austin’s Rainey Street district, the preferred leisure district within the downtown space. Bolstered by the relocation of a number of Fortune 500 firm headquarters, Austin is the third quickest rising metropolis of the final decade and its inhabitants is projected to develop one other 30% by 2029. The Rainey Street submarket is poised to learn from a number of close by mixed-use developments at present beneath building or in planning, in addition to the $1.2 billion growth of the conference heart, located inside strolling distance of the resort.

In addition to the Hotel Van Zandt acquisition, the Company additionally introduced that it has bought the 1,220-room Sheraton Boston for roughly $233 million. The sale value represents a 14.2x EBITDA a number of² on 2019 EBITDA, which incorporates roughly $135 million of estimated foregone capital expenditures over the subsequent 5 years. In reference to the sale, the Company is offering a $163 million bridge mortgage to the purchaser.

James F. Risoleo, President and Chief Executive Officer, stated, “We are thrilled to add a second hotel in Austin to our portfolio with the Hotel Van Zandt. The hotel is well-located with no expected near-term capex in a market with multiple demand drivers and a history of strong RevPAR growth. In addition, the sale of the Sheraton Boston allowed us to redeploy capital into other assets that we believe will bolster the EBITDA growth profile of our portfolio. We continue to be very active on the capital allocation front as we target new growing markets in the United States. Since the beginning of 2021, we have invested $1.6 billion in early-cycle acquisitions. The blended EBITDA multiple on our seven hotel acquisitions is 13.0x³, which compares favorably to the nearly $1 billion generated, including amounts due under seller financing, from our seven hotel dispositions at a 15.4x² EBITDA multiple, including estimated foregone capital expenditures.”

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is an S&P 500 firm and is the most important lodging actual property funding belief and one of many largest homeowners of luxurious and upper-upscale resorts. The Company at present owns 75 properties within the United States and 5 properties internationally totaling roughly 44,400 rooms. The Company additionally holds non-controlling pursuits in six home and one worldwide three way partnership.

FORWARD LOOKING STATEMENTS

Note: This press launch incorporates forward-looking statements throughout the that means of federal securities laws. These forward-looking statements are recognized by their use of phrases and phrases equivalent to “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “plan,” “predict,” “project,” “will,” “continue” and different comparable phrases and phrases, together with references to assumptions and forecasts of future outcomes. Forward-looking statements usually are not ensures of future efficiency and contain identified and unknown dangers, uncertainties and different elements which can trigger the precise outcomes to vary materially from these anticipated on the time the forward-looking statements are made. These dangers embody, however usually are not restricted to: the length and scope of the COVID-19 pandemic and its quick and longer-term influence on the demand for journey, transient and group business, and ranges of client confidence; actions governments, companies and people absorb response to the pandemic, together with limiting or banning journey; the influence of the pandemic and actions taken in response to the pandemic on world and regional economies, journey, and financial exercise, together with the length and magnitude of its influence on unemployment charges, business funding and client discretionary spending; the tempo of restoration when the COVID-19 pandemic subsides; basic financial uncertainty in U.S. markets the place we personal resorts and a worsening of financial circumstances or low ranges of financial progress in these markets; different adjustments (other than the COVID-19 pandemic) in nationwide and native financial and business circumstances and different elements equivalent to pure disasters and climate that may have an effect on occupancy charges at our resorts and the demand for resort merchandise and companies; the influence of geopolitical developments outdoors the U.S. on lodging demand; volatility in world monetary and credit score markets; working dangers related to the resort business; dangers and limitations in our working flexibility related to the extent of our indebtedness and our capacity to satisfy covenants in our debt agreements; dangers related to {our relationships} with property managers and three way partnership companions; our capacity to keep up our properties in a first-class method, together with assembly capital expenditure necessities; the consequences of resort renovations on our resort occupancy and monetary outcomes; our capacity to compete successfully in areas equivalent to entry, location, high quality of lodging and room charge constructions; dangers related to our capacity to finish acquisitions and tendencies and develop new properties and the dangers that acquisitions and new developments might not carry out in accordance with our expectations; our capacity to proceed to fulfill advanced guidelines to ensure that us to stay an actual property funding belief for federal revenue tax functions; and different dangers and uncertainties related to our business described within the Company’s annual report on Form 10-Ok, quarterly experiences on Form 10-Q and present experiences on Form 8-Ok filed with the SEC. Although the Company believes the expectations mirrored in such forward-looking statements are primarily based upon cheap assumptions, it may give no assurance that the expectations can be attained or that any deviation won’t be materials. All info on this launch is as of the date of this launch and the Company undertakes no obligation to replace any forward-looking assertion to evolve the assertion to precise outcomes or adjustments within the Company’s expectations.

¹ Consistent with business observe, we calculate the EBITDA a number of because the ratio of the acquisition value to the property’s EBITDA. EBITDA is a non-GAAP measure. The comparable GAAP metric to EBITDA a number of is the ratio of the acquisition value to internet revenue. The ratio of the acquisition value to 2019 internet revenue is 22.4x primarily based on internet revenue of $11 million. The ratio of the acquisition value to stabilized internet revenue is 15.8x primarily based on forecast stabilized internet revenue of $15 million. The distinction between internet revenue and EBITDA is depreciation expense of $7.5 million for each durations. Stabilized outcomes are illustrative solely. Our capacity to realize the 2025-2027 outcomes is topic to numerous uncertainties and precise outcomes could also be materially totally different.
² Disposition multiples are calculated because the ratio between the gross sales value (plus estimated prevented capital expenditures) and 2019 EBITDA. The ratio of the acquisition value to 2019 internet revenue for the Sheraton Boston is eighteen.2x. The Sheraton Boston 2019 internet revenue is $13 million and the distinction between internet revenue and EBITDA is depreciation expense of $13 million. The ratio of the acquisition value to internet revenue for the mixed 2021 and 2022 tendencies is 24.4x and estimated prevented capital expenditures over the 5 years following disposition date totaled $290 million. The mixed internet revenue of the 2021 and 2022 tendencies is $40 million and the distinction between internet revenue and EBITDA is depreciation expense of $42 million.
³ The blended EBITDA a number of relies on 2019 operations for Hyatt Regency Austin, Four Seasons Resort Orlando at Walt Disney World® Resort, and Hotel Van Zandt and the 2021 forecast at acquisition for Baker’s Cay Resort and Alila Ventana Big Sur, as these resorts skilled renovation disruption and closures in 2019. Estimated normalized 2019 operations had been used for The Laura Hotel, assuming a brand new supervisor and model, and for The Alida, Savannah, adjusting for building disruption to the encompassing Plant Riverside District and for preliminary ramp-up of resort operations. The blended ratio of the acquisition value to internet revenue for these acquisitions is 21.1x, utilizing internet revenue of $74 million. The distinction between mixed internet revenue and EBITDA is depreciation expense of $46 million. In addition, EBITDA contains an upward adjustment of $13 million to mirror normalized operations for each The Laura Hotel and The Alida, Savannah.