BETHESDA, Md. - Host Hotels & Resorts, Inc. (NASDAQ: HST), the nation's leading lodging real estate investment trust, today announced its agreement to purchase Turtle Bay Resort on Oahu's North Shore. The $680 million deal includes the acquisition of a 450-room resort and a 49-acre development-ready land parcel.
The transaction, subject to customary closing conditions, is anticipated to finalize by late July 2024. The resort, which recently underwent a significant renovation, will be managed by Marriott under The Ritz-Carlton brand post-acquisition.
Host Hotels & Resorts has allocated $630 million for the resort and $50 million for the land parcel, with the acquisition price reflecting a 16.3x EBITDA multiple or a 5.3% cap rate based on the resort's projected 2024 results. The company expects the resort to be among its top assets, forecasting a 2024 RevPAR of $570, Total RevPAR of $980, and EBITDA per key of $86,000.
Following the rebranding to The Ritz-Carlton, the resort is projected to stabilize at 10-12x EBITDA between 2027-2029. James F. Risoleo, President and CEO of Host, expressed enthusiasm for the acquisition, citing Oahu's high leisure demand, diverse international demand base, and high barriers to entry.
The Turtle Bay Resort boasts a prime location on 1,180 acres with extensive amenities, including ocean-view rooms, bungalows, a club lounge, food and beverage outlets, retail spaces, a spa, and recreational facilities. The included land parcel offers long-term value enhancement opportunities, aligning with Host's strategic approach at other properties.
Host Hotels & Resorts is an S&P 500 company and the largest owner of luxury and upper-upscale hotels, with 74 properties in the U.S. and five internationally, totaling approximately 42,700 rooms.
This news is based on a press release statement from Host Hotels & Resorts, L.P.
InvestingPro Insights
Host Hotels & Resorts, Inc. (NASDAQ: HST) continues to make strategic investments, as seen with their latest acquisition of Turtle Bay Resort. The company's financial health and market performance offer valuable insights for investors considering this REIT. Here are some key takeaways from InvestingPro:
InvestingPro Data shows that Host Hotels & Resorts has a market capitalization of $12.62 billion, reflecting the company's significant presence in the industry. The P/E ratio stands at 17.35, indicating investor expectations of future earnings growth, particularly relevant as the company expands its luxury portfolio with the Turtle Bay Resort acquisition.
The company also boasts a robust dividend yield of 6.88%, a testament to its commitment to returning value to shareholders. This aligns with the InvestingPro Tip that Host Hotels & Resorts pays a significant dividend to shareholders, which can be particularly attractive for income-focused investors.
Moreover, the company's management has been proactively enhancing shareholder value, as evidenced by an aggressive share buyback strategy. This is an important factor for investors to consider, as it can potentially lead to earnings growth per share over time.
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