DALLAS, December 1, 2022 /PRNewswire/ — Braemar Hotels & Resorts Inc. (NYSE: BHR) (“Braemar” or the “Company”) today announced that it has completed the acquisition of the luxurious 210-room Four Seasons Resort Scottsdale at Troon North in North Scottsdale, previously announced on November 1, 2022. The total purchase price was $267.8 million. The acquisition was financed with cash and no common shares were issued to finance the acquisition. As previously announced, out of the total consideration, $250 million ($1.2 million per key) is allocated to the existing resort and represents a capitalization rate of 5.7% on net hotel operating income of $14.2 million and a hotel EBITDA multiple of 15.2x, based on unaudited operating financial data provided by the sellers and expected financial results for 2022. The Company expects to achieve a stabilized return of approximately 8.0% on its investment over the next three to five years. The 5.7 acres of excess developable land have been tentatively allocated $17.8 million of the purchase price and is zoned for commercial use. Potential uses include new hotel keys, as well as fitness and health studios, restaurants, and accessory buildings. Final rights will be based on designs submitted for approval by the Scottsdale Design Review Board.
Braemar Hotels & Resorts is a Real Estate Investment Trust (REIT) focused on investing in luxury hotels and resorts.
Braemar Hotels & Resorts Inc. |
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Four Seasons Resort Scottsdale at Troon North |
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Reconciliation of hotel net income with hotel EBITDA and hotel net operating income |
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(Unaudited, in millions) |
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12 months ending |
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December 31, 2022 |
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Net profit (loss) |
$4.0 |
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Interest expense |
4.3 |
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Depreciation and amortization |
8.2 |
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Hotel EBITDA |
$16.5 |
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Capital reserve |
(2.3) |
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Hotel net operating income |
$14.2 |
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All information in this table is based on unaudited forecast operating financial data for the twelve month period ending December 31, 2022. This data has not been audited or reviewed by the Company’s independent registered accounting firm. The financial information presented may change.
EBITDA is defined as net income (loss), calculated in accordance with generally accepted accounting principles (“GAAP”), before interest, taxes, depreciation and amortization. The hotel’s 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 hotel’s EBITDA minus a capital expenditure reserve of 4% or 5% of gross revenue.
Certain statements and assumptions in this press release contain or are based upon “forward-looking” information and are 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 other things, statements about the Company’s strategy and future plans. These forward-looking statements are subject to risks and uncertainties. When we use the words “probably will result”, “may”, “anticipate”, “estimate”, “should”, “expect”, “believe”, “intend”, or similar expressions, we have intent to identify statements. Such statements are subject to numerous assumptions and uncertainties, many of which are beyond Braemar’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: the impact of COVID-19, and the rate adoption and effectiveness of vaccines to prevent COVID-19, our business and investment strategy; our ability to repay, refinance or restructure our debt and the debt of certain of our subsidiaries; planned or expected purchases or sales of assets; our projected operating results; the completion of any pending transactions; risks associated with our ability to implement our dividend policy, including factors such as operating results and the economic outlook influencing our board’s decision to pay additional dividends at previously disclosed levels or use cash available to pay dividends; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility in financial markets and the market price of our common stock and preferred stock; the availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are discussed more fully in Braemar’s filings with the Securities and Exchange Commission.
Forward-looking statements included in this press release speak only as of the date of this press release. These forward-looking statements are based on our beliefs, assumptions and expectations regarding our future performance taking into account all information currently available to us. These beliefs, assumptions and expectations may change due to many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans and other objectives may differ materially from those expressed in our forward-looking statements. You should carefully consider this risk when making an investment decision regarding our securities. Investors should not place undue reliance on these forward-looking statements. The Company cannot guarantee that these forward-looking statements will be achieved or that no deviations will occur. We are under no obligation 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, except to the extent required by law. law.
SOURCE Braemar Hotels & Resorts Inc.