BETHESDA, Md., May 29, 2024 — 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 term. We look forward to working with employees and local partners to build upon the Resort’s preeminent position on the North Shore of Oahu. With the planned Ritz-Carlton rebranding, we believe the Resort will generate outsized growth as it stabilizes, further elevating the EBITDA growth profile of our portfolio.”
The Resort is situated in a unique location on 1,180-acres on the North Shore of Oahu with five miles of beach and coastline views. It features 450 rooms, all with ocean views, including 42 bungalows with direct beach access, a separate check-in, and a private pool. Other amenities include 18,000 square feet of indoor meeting space, a club lounge, six food and beverage outlets, seven retail spaces, a spa, fitness center, two golf courses, seven beaches, four resort pools, tennis and pickle ball courts, an equestrian center, a working farm, and access to 12 miles of oceanfront trails. 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.
