Dallas-based real estate investment trust Braemar Hotels & Resorts is making strategic moves to further create long-term value for its shareholders.
As part of the strategy, Braemar signed a definitive agreement to sell the 394-room Hilton La Jolla Torrey Pines in La Jolla, California, for $165 million to an unnamed buyer, according to a news release. The deal is expected to close in August.
CoStar data shows that Braemar purchased the hotel as part of an eight-property portfolio from Ashford Hospitality Trust in 2013. Both Ashford Trust and Braemar are advised by Ashford Inc. Braemar is focused on investing in luxury hotels and resorts and Ashford Trust invests in upper upscale, full-service hotels.
Prior to selling in 2013, the Hilton La Jolla Torrey Pines traded in 2007 as part of a 50-hotel portfolio. The last time the hotel was sold as an individual property was in 2003 for $106.5 million.
Braemar is also evaluating the sale of two other hotels as part of the value creation plan.
Additionally, it has fully repaid an outstanding $30 million loan associated with the 143-room Cameo Beverly Hills hotel. This means, pending the sale of the Hilton La Jolla Torrey Pines, Braemar has refinanced or paid off all its 2024 debt maturities.
This is in line with Braemar CEO Richard Stockton's goal he declared at the start of the year to refinance some existing debt.
The REIT plans to redeem $50 million of its non-traded preferred or public preferred stock in 2024 and will use proceeds from the pending sale of the Hilton Torrey Pines.
Lastly, Braemar's board of directors has authorized a new stock repurchase program of up to $50 million, including through open market transactions and privately negotiated transactions.
"Today's announcements reflect our commitment to reduce the company's dividend and interest expense, enhance our capital structure and financial flexibility, as well as create value for our shareholders," Stockton said in the news release. "The planned sale of the Hilton La Jolla Torrey Pines at an attractive cap rate demonstrates the high-quality nature of the Braemar portfolio. We continue to be excited about the future prospects for Braemar."