Host Lodges & Resorts Acquires The Alida, Savannah and Disposes of W Hollywood

BETHESDA, Maryland, Dec. 20, 2021 (GLOBE NEWSWIRE) – Host Hotels & Resorts, Inc. (NASDAQ: HST), the nation’s largest investment fund for vacation homes (the “Company”), today announced the acquisition of. announced the fee for a simple stake in The Alida, Savannah, a 173-room boutique hotel for approximately $ 103 million in cash.

This newly built hotel opened in October 2018 and benefits from the soft branding in the Marriott Tribute portfolio. Rooms average 371 square feet with high ceilings, hardwood floors, built-in window sills, and marble bathrooms. The hotel offers 11,570 square feet of meeting space (5,170 indoors), four F&B outlets, including a rooftop bar with panoramic views, an outdoor pool, and street retail space.

A stabilization for The Alida is expected in the 2024-2025 timeframe at around 11-12x EBITDA1 with a RevPAR of around $ 240. Stabilized EBITDA for the property is in line with the company’s estimate for normalized operations in 2019, which takes into account construction disruptions in the surrounding Plant Riverside District and the initial ramp-up of hotel operations.

The Alida is located in the historic Savannah neighborhood, one block from the Savannah River, and adjacent to a newly developed entertainment district, including the Plant Riverside District. A strong tourism industry has contributed to favorable market momentum in recent years – 2019 marked 10 straight years of record visits, nine straight years of record visitor spending, and a 5-year RevPAR CAGR more than 100 basis points higher than that of the broader US anticipate future growth to be driven by several recreational demand drivers, including Savannah being a drive-to leisure destination for rapidly growing Southeast feeder markets and air traffic through Savannah / Hilton Head International Airport increasing. The hotel is also benefiting from internal and external demand from the group, supported by the $ 271 million expansion of the convention center, expected to be completed in 2024.

In addition to acquiring The Alida, the company announced that it had sold the 305-room lease in W Hollywood for a total sale price of approximately $ 197 million, including $ 3 million for the FF&E replacement fund. The selling price represents a 25.0 times EBITDA multiple2 of 2019 EBITDA, including approximately $ 33 million in estimated lost investments over the next five years.

James F. Risoleo, President and Chief Executive Officer, said, “We are excited to further diversify our portfolio with the acquisition of The Alida, Savannah. The hotel is like new with no expected short-term investments in a market with low operating costs, multiple demand drivers and strong RevPAR growth in the past, while the sale of the W Hollywood reduces our exposure to long-term leases and avoids the need for larger capital investments and that with it related disorder. We remain very active on capital allocation as we target new markets. Since the beginning of the year, we’ve invested $ 1.3 billion in early cycle acquisitions. The mixed EBITDA multiple of our six hotel acquisitions in 2021 is 12.9×3, compared to the nearly $ 750 million generated from our six hotel sales for an EBITDA multiple of 16.0×2, including lost investments. is cheap. “

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is an S&P 500 company and the largest lodging real estate mutual fund and one of the largest owners of luxury and upscale hotels. The company currently owns 75 properties in the United States and five properties internationally, with a total of approximately 45,300 rooms. In addition, the company holds non-controlling interests in six domestic and one international joint venture.

FORWARDING STATEMENTS

Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by the use of terms and expressions such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “can”, “should”, “plan” “, “Predict,” “project,” “will,” “continue,” and other similar terms and expressions, including references to assumptions and projections of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated at the time the forward-looking statements were made. These risks include, but are not limited to: the duration and scope of the COVID-19 pandemic and its short- and long-term effects on demand for travel, transit and group business, and consumer confidence; Actions governments, businesses and individuals are taking in response to the pandemic, including restricting or banning travel; the impact of the pandemic and the actions taken in response to the pandemic on the global and regional economies, travel and economic activity, including the duration and extent of its impact on unemployment rates, business investment and cyclical consumer spending; the pace of recovery as the COVID-19 pandemic subsides; general economic uncertainty in the US markets in which we own hotels and deterioration in economic conditions or poor economic growth in those markets; other changes (other than the COVID-19 pandemic) in national and local economic and business conditions and other factors such as natural disasters and weather that will affect the occupancy of our hotels and the demand for hotel products and services; the impact of geopolitical developments outside the US on the demand for accommodation; Volatility in global financial and credit markets; Operational risks associated with the hotel business; Risks and limitations to our operational flexibility related to our level of debt and our ability to meet obligations in our debt agreements; Risks associated with our relationships with property managers and joint venture partners; our ability to maintain our properties in a top quality manner, including meeting investment requirements; the impact of hotel renovations on our hotel occupancy and financial results; our ability to compete effectively in areas such as access, location, quality of accommodation and room rate structures; Risks associated with our ability to complete acquisitions and disposals and develop new properties and the risks that acquisitions and new developments will not meet our expectations; our ability to continue to comply with complex regulations in order for us to remain a real estate investment trust for federal income tax purposes; and other risks and uncertainties relating to our business described in the company’s annual report on Form 10-K, its quarterly reports on Form 10-Q, and its most recent reports on Form 8-K filed with the SEC. Although the company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no guarantee that the expectations will be met or that differences will not be material. All information in this press release is as of the date of this press release, and the company assumes no obligation to update forward-looking statements to reflect actual results or changes in company expectations.

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1 As is customary in the industry, we calculate the EBITDA multiple as the ratio of the purchase price to the EBITDA of the property. EBITDA is a non-GAAP measure. The comparable GAAP figure for the EBITDA multiple is the ratio of the purchase price to the net profit. The ratio of the purchase price to stabilized net income of The Alida, Savannah expected in the 2024-2025 period is 18.2x based on projected stabilized net income of $ 6 million. The difference between net income and EBITDA is a depreciation charge of $ 3 million. Stabilized results are for illustrative purposes only. Our ability to achieve results between 2024 and 2025 is subject to various uncertainties and actual results may differ materially.
2 Disposition multipliers are calculated as the ratio between the sales price (plus estimated avoided investments) and EBITDA 2019. The ratio of the purchase price to the 2019 net income for the W Hollywood is 142x. W Hollywood 2019 net income is $ 1 million and the difference between net income and EBITDA is a depreciation charge of $ 8 million. The purchase price to net income ratio for the combined disposals in 2021 is 27 times and the estimated avoided investments in the five years following the disposal totaled $ 155 million. Combined net income on disposals in 2021 is $ 27 million, and the difference between net income and EBITDA is a depreciation charge of $ 29 million.
3 The mixed EBITDA multiple is based on 2019 operations for the Hyatt Regency Austin and Four Seasons Resort Orlando at Walt Disney World® Resort and the forecast for 2021 at the acquisition for Baker’s Cay Resort and Alila Ventana Big Sur, as these hotels are under renovation and Closures experienced in 2019. Estimated normalized 2019 operations were used for The Laura Hotel, taking over a new manager and brand, and The Alida, Savannah, to accommodate construction disruptions in the surrounding Plant Riverside District and the initial ramp-up of hotel operations consider. The mix ratio of purchase price to net income for the 2021 acquisitions is 20.8x on net income of $ 62 million. The difference between combined net income and EBITDA corresponds to a depreciation charge of $ 38 million. Additionally, EBITDA includes an adjustment of $ 13 million to reflect normalized operations for both The Laura Hotel and The Alida, Savannah.

Source: Host Hotels & Resorts, Inc.

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