DALLAS, March 13, 2017 –
Acquisition Highlights:
- Trophy asset located slope-side in the epicenter of the picturesque mountain resort village of Beaver Creek, Colorado
- Unique ski-in/ski-out access to one of the world's most celebrated ski destinations, Beaver Creek Mountain
- Revenue per available room (RevPAR) of $270.92 for the 12 months ended January 31, 2017
- Property is in excellent physical condition with limited immediate capex needs
Ashford Hospitality Prime, Inc. (NYSE: AHP) ("Ashford Prime" or the "Company") today announced it has entered into a definitive agreement to acquire the 190-room Park Hyatt Beaver Creek Resort & Spa in Beaver Creek, Colorado (the "Park Hyatt" or the "Property") for $145.5 million ($766,000 per key). The Company plans to use the proceeds from its recently completed public offerings to fund the acquisition and intends to finance the property with approximately $68 million of non-recourse mortgage debt. The acquisition is expected to close within 30 days subject to customary closing conditions. Because the acquisition is subject to 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 iconic Park Hyatt Beaver Creek Resort & Spa is an opportunity for us to acquire a premier resort with the best location in the very attractive Beaver Creek market," said Richard J. Stockton, Ashford Prime's Chief Executive Officer. "This property fits perfectly with our strategy of owning luxury hotels and resorts and further diversifies our portfolio by establishing a presence in the highly sought after Vail Valley market."
Located in the heart of Beaver Creek Village, the Park Hyatt is ideally positioned in the most prestigious location within the Vail Valley. The Vail Valley is approximately 90 miles west of Denver and is one of the most exclusive resort destinations in North America. Within the Vail Valley, Beaver Creek is the epitome of exclusivity, drawing visitors who enjoy the best in understated luxury. With its premier location, luxury brand affiliation and world-class amenities, the Park Hyatt is positioned as the leading resort in one of North America's most renowned luxury resort destinations. Beyond the world-class hotel, guests have easy access to Beaver Creek's famous amenities, including exceptional dining and shops, the 535-seat Vilar Performing Arts Center, and an outdoor ice skating rink. While the Vail Valley is home to some of the top ski areas in the world and is a top winter destination, it is also very popular as a summer destination as it boasts many diverse leisure activities, including hiking, biking, white water rafting, fishing, golfing, shopping and festivals.
The Park Hyatt was built in 1989 and has 190 luxurious and spacious rooms, including 23 suites. The resort also offers an array of amenities, including the award-winning 30,000 sq. ft. Allegria Spa, four food and beverage outlets, including the world-class 8100 Mountainside Bar & Grill, over 20,000 sq. ft. of flexible indoor meeting space, a heated outdoor pool beneath a mountain waterfall, 24-hour state-of-the-art fitness club, ski valet service, outdoor fire pits and access to two championship golf courses and the Beaver Creek Tennis Center. Additionally, the Property features over 18,800 sq. ft. of fully leased, highly visible retail space in the heart of Beaver Creek. The Property is in excellent physical condition after having spent over $7.5 million in capital improvements over the past few years. Post-closing, the property will continue to be managed by Hyatt.
In addition, the Park Hyatt Beaver Creek Hotel & Spa has been the recipient of the following awards:
- AAA Four Diamond
- Travel & Leisure – America's Best Family Resort
- Conde Nast Traveler – Reader's Choice Award
- Conde Nast Traveler – Gold List – Best Place to Stay in Colorado
- Conde Nast Traveler – Top 25 Spas in the World
- Wine Spectator – Award of Excellence
- Trip Advisor – Certificate of Excellence
- Trip Advisor – Green Leaders
- WeddingWire – Couples' Choice Award
- Huffington Post – 10 Best Ski Resorts in the World
- U.S. News & World Report – Gold Badge Winner "Best Hotels in the USA"
The purchase price for the Park Hyatt represents, as of January 31, 2017, a trailing 12-month capitalization rate of 6.0% on hotel net operating income of $8.7 million and a trailing 12-month 14.8x hotel EBITDA multiple, according to the Company's preliminary estimates based on unaudited operating financial data provided by the sellers. On a forward 12-month basis, the purchase price represents an estimated cap rate of 6.4% on estimated net operating income of $9.2 million and an estimated EBITDA multiple of 14.0x. On a trailing 12-month basis as of January 31, 2017, the Property achieved RevPAR of $270.92, with 62.5% occupancy and an average daily rate (ADR) of $433.57, according to unaudited operating financial data provided by the sellers. A reconciliation of non-GAAP financial measures is included in the financial table below.
Ashford Hospitality Prime Park Hyatt Beaver Creek Resort & Spa Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income (Unaudited, in millions)
12 Months Ended December 31, 2016
Estimated 12 Months Ended December 31, 2017
Hotel Net Income
$ 8.0
$ 8.0
Adjustment:
Depreciation and amortization
$ –
$ –
Interest expense
$ 1.8
$ 2.4
Hotel EBITDA
$ 9.8
$ 10.4
Adjustment:
Capital reserve
$ (1.1)
$ (1.2)
Hotel Net Operating Income
$ 8.7
$ 9.2
(1) All information in this table is based upon unaudited operating financial data provided by the seller for the year ended December 31, 2016. Financial statements for the property have not been prepared for the year ended December 31, 2016, and this data has not been audited, reviewed or compiled by the Company's independent registered public accounting firm, and therefore the financial information presented will likely change.
EBITDA is defined as net income (loss), computed in accordance with generally accepted accounting principles ("GAAP"), before interest, taxes, depreciation and amortization. Hotel EBITDA multiple is defined as the purchase price divided by the trailing 12 month EBITDA. A capitalization rate is determined by dividing the property's annual net operating income by the purchase price. Net operating income is the property's hotel EBITDA minus a capital expense reserve of either 4% or 5% of gross revenues.
Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, among others, statements about the closing of the acquisition of the Park Hyatt Beaver Creek and the related property-level financing. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford Prime's control. These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: general volatility of the capital markets and the market price of our common stock; changes in our business or investment strategy; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the market in which we operate, interest rates or the general economy; our ability to successfully complete and integrate acquisitions, and manage our planned growth, and the degree and nature of our competition. These and other risk factors are more fully discussed in Ashford Prime's filings with the Securities and Exchange Commission. The forward-looking statements included in this press release are only made as of the date of this press release. Investors should not place undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise.
