HST - Host Hotels & Resorts Enters into Agreement to Acquire Turtle Bay Resort in Hawaii | Benzinga
BETHESDA, Md., May 29, 2024 (GLOBE NEWSWIRE) -- Host Hotels & Resorts, Inc. (NASDAQ:HST) ("Host" or the "Company"), the nation's largest lodging real estate investment trust, today announced that it entered into an agreement to acquire the fee simple interest in the 450-room Turtle Bay Resort (the "Resort,") on the North Shore of Oahu, Hawaii, including a 49-acre land parcel entitled for development, (the "Land Parcel") for approximately $680 million, net of key money. 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 results1. The purchase is subject to customary closing conditions and the transaction is expected to close in late July of 2024.
The Resort recently benefitted from a transformative renovation and was closed from March of 2020 to June of 2021. The renovation included the guestrooms and bungalows, lobby, pools, restaurants, retail, meeting space, spa, a new club lounge, building systems, as well as an updated exterior and arrival experience. It is being acquired fully unencumbered of brand and management, and at closing, Host intends to transition management to Marriott and flag the hotel with The Ritz-Carlton brand. In connection with the rebranding, Marriott provided key money and favorable modifications on several existing management agreements. Before taking into account the significant upside that is expected from The Ritz-Carlton branding, the Resort is expected 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 $86,0002. After ramping up from the recent renovation and the rebranding, the Company expects the Resort to stabilize between approximately 10-12x EBITDA3 in the 2027-2029 timeframe.
James F. Risoleo, President and Chief Executive Officer, said, "We are thrilled to enter into an agreement to acquire Turtle Bay Resort, which will further expand and diversify our already strong presence in Hawaii. Oahu is a high demand leisure destination with consistently high occupancy, an internationally diverse demand base, and high barriers to entry, resulting in slightly negative supply growth historically and essentially no anticipated near-term supply. In addition, because of the Resort's recent transformational renovation, we do not expect meaningful capital expenditures in the near ...