Among the noteworthy deals of the past week was
Host Hotels & Resorts’ acquisition of the Turtle Bay Resort from Blackstone
Real Estate for $725 million.
OAHU, Hawaii — Host Hotels & Resorts agreed with Blackstone Real Estate last week to
acquire the fee simple interest in the 450-key Turtle Bay Resort on the North
Shore of Oahu, Hawaii, including a 49-acre land parcel entitled for
development, for a total price of approximately $725 million.
The deal includes a
net of an estimated $45 million in key money from Marriott International. Host
will rebrand the property as a Ritz-Carlton and Marriott will manage and
provide “favorable modifications on several existing management agreements.”
Host said the
purchase price allocation is expected to be $630 million for the resort and $50
million for the land parcel, subject to final appraisal. The acquisition price
represents a 16.3x EBITDA multiple or a cap rate of approximately 5.3% on the
resort’s 2024 estimated results. The purchase is subject to customary closing
conditions, and the transaction is expected to close in late July 2024.
Blackstone purchased
the hotel in 2018 for $332 million and invested significant capital in
renovations.
Before taking into
account the significant upside that is expected from The Ritz-Carlton branding,
the resort is expected to be one of Host’s top assets based on estimated
full-year 2024 results with an expected RevPAR of $570, Total RevPAR of $980
and EBITDA per key of $86,000. After ramping up from the recent renovation and
the rebranding, Host expects the resort to stabilize approximately 10-12x
EBITDA in the 2027-2029 timeframe.
The 49-acre
oceanfront land parcel is entitled for development, and similar to the
company’s strategy at other properties, Host intends to enhance its value over
the long term.
To download our list
of deals from the past week in Excel format, click here.