BETHESDA, MD – December 21, 2021 – Host Hotels & Resorts, Inc. (NASDAQ: HST), the nation’s largest lodging real estate investment trust (the “Company”), today announced that it has acquired the fee simple interest in The Alida, Savannah, a 173-room boutique hotel, for approximately $103 million in cash.
This newly constructed hotel opened in October 2018 and benefits from soft branding in Marriott’s Tribute Portfolio. Rooms average 371 square feet with high ceilings, hardwood floors, built-in window seats and marble bathrooms. The hotel offers 11,570 square feet of meeting space (5,170 indoor), four F&B outlets including a rooftop bar with panoramic views, an outdoor pool, and street-front retail space.
Stabilization for The Alida is expected in the 2024-2025 timeframe at approximately 11-12x EBITDA1 with RevPAR of approximately $240. The stabilized EBITDA for the property is consistent with the Company’s estimate of normalized 2019 operations, which adjusts for construction disruption to the surrounding Plant Riverside District and the initial ramp-up of the hotel operations.
The Alida is located in Savannah’s historic district just one block from the Savannah River, directly adjacent to a newly developed entertainment district, including the Plant Riverside District. A strong tourism industry has contributed to favorable market dynamics over the past several years – 2019 marked 10 consecutive years of record visitation, nine consecutive years of record visitor spending, and a five-year RevPAR CAGR more than 100 basis points higher than the broader U.S. We expect future growth to be buoyed by multiple leisure demand drivers including the fact that Savannah is a drive-to leisure destination for fast-growing feeder markets in the Southeast and there is increasing air traffic through the Savannah/Hilton Head International Airport. The hotel also benefits from both in-house and out-of-house group demand, which are likely to be bolstered by the $271 million convention center expansion expected to be completed in 2024.
In addition to The Alida acquisition, the Company also announced that it has sold the leasehold interest in the 305-room W Hollywood for a total sales price of approximately $197 million, including $3 million for the FF&E replacement funds. The sale price represents a 25.0x EBITDA multiple2 on 2019 EBITDA including approximately $33 million of estimated foregone capital expenditures over the next five years.
James F. Risoleo, President and Chief Executive Officer, said,
“We are pleased to further diversify our portfolio with the acquisition of The Alida, Savannah. The hotel is like new with no expected near-term capex in a market with favorable operating costs, multiple demand drivers, and a history of strong RevPAR growth while the sale of the W Hollywood reduces our ground lease exposure and obviates the need for major capital investment and associated disruption. We continue to be very active on the capital allocation front as we target new markets. Year-to-date, we have invested $1.3 billion in early-cycle acquisitions. The blended EBITDA multiple on our six hotel acquisitions in 2021 is 12.9x3, which compares favorably to the nearly $750 million generated from our six hotel dispositions at a 16.0x2 EBITDA multiple, including foregone capital expenditures.”
