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Host Hotels & Resorts, Inc. (NASDAQ:HST), the nation’s largest housing real estate investment trust (the “Company”), today announced that it has acquired a small fee stake in The Alida, Savannah, a 173-room boutique hotel. , for approximately $103 million in cash.
This newly built hotel opened in October 2018 and benefits from the soft-branding brands of the Marriott Tribute Portfolio. Rooms average 371 square feet with high ceilings, wood 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.
Alida is expected to stabilize in the 2024-2025 time frame at approximately 11-12x EBITDA1 with a RevPAR of approximately $240. The property’s EBITDA is in line with the company’s estimate of normalized 2019 operations, which adjusts for construction disruption in the surrounding Plant Riverside area and the initial intensification of hotel operations.
Alida is located in the Historic District of Savannah, just one block from the Savannah River, adjacent to a newly developed recreation area, including the Planet Riverside District. The robust tourism industry has contributed to favorable market dynamics over the past several years – 2019 saw 10 consecutive years of record visits, nine consecutive years of record visitor spending, and a five-year compound annual growth rate (RevPAR) of over 100 basis points from the US the broadest. We expect future growth to be supported by several drivers of leisure demand including the fact that Savannah is a leisure drive destination for the rapidly growing nutritious markets in the Southeast and there is increased air traffic through Savannah/Hilton Head International Airport. The hotel also benefits from indoor and outdoor pool demand, which is likely to be boosted by the $271 million expansion of the convention center expected to be completed in 2024.
In addition to the acquisition of Alida, the company also announced that it had sold the lease rights to the 305-room W Hollywood for a total price of approximately $197 million, including $3 million for FF&E replacement funds. The selling price represents 25.0 times the EBITDA multiple of 2 over the 2019 EBITDA including approximately $33 million in estimated capital expenditures over the next five years.
Said James F. Rizzoli, President and CEO: “We are pleased to further diversify our portfolio with the acquisition of Alida, Savannah. The hotel looks brand new with no capital expenditures expected in the near term in a market with favorable operating costs, multiple demand factors, and a history of strong room revenue growth. available, while the sale of W Hollywood reduces our exposure to land leases and eliminates the need for significant capital investment and the associated turmoil. We continue to be aggressive on the capital allocation front as we target new markets. YTD invested $1.3 billion in acquisitions The mixed EBITDA multiplier on our six acquisitions in 2021 is 12.9 x 3, which compares favorably to the approximately $750 million resulting from the actions of the six hotels at a multiplier of 16.0 x 2 EBITDA, including lost capital expenditures.”