Hyatt Hotels Corp. sold the 1,641-room Hyatt Regency Orlando — its fourth-largest asset by room count — to affiliates of RIDA Development Corp. and an Ares Management real estate fund for $1.07 billion. The deal’s per-room price is approximately $652,041.
The property was previously sold by a joint venture to Hyatt in 2013 for $717 million, or $436,929 per room.
Hyatt is to retain management of the hotel, which has approximately 315,000 square feet of event space, under the Hyatt Regency brand. The hotel firm also retained $265 million of non-controlling preferred equity and “provided an additional $50 million of seller financing for the adjacent 45-acre parcel” of land, which is earmarked for a Grand Hyatt-branded hotel.
That new hotel, also owned by RIDA and Ares, is undergoing its approval process “over the next several years … [the hotel] is expected to have approximately 2,500 rooms and be developed in multiple stages.”
Both hotels are adjacent to the Orange County Convention Center — which has approximately 7 million square feet of space and 296 meeting and breakout rooms, among other facilities.
This continues Hyatt’s stated strategy of becoming more asset light has now surprised a 2021 commitment to sell more than $2 billion in real estate. The news release said that it now has “realized $2.6 billion of gross proceeds, net of acquisitions, at a 13.3-times multiple.”
In early August at an analysts call accompanying Hyatt’s second-quarter 2024 earnings results, Hotel News Now’s Sean McCracken reported that Hyatt’s President and CEO Mark Hoplamazian said the company planned to continues its strategy of selling real estate to fund the acquisition of fee-based brands, similar to its acquisitions of Dream Hotel Group, Two Roads Hospitality and Apple Leisure Group. Media reports have linked Hyatt to a potential acquisition of Standard International, but company officials have not yet commented on any potential deal with Standard.
During that call, the firm noted its latest sales would "bring the company up to $3.6 billion in hotels sold since committing to an asset-light business model in 2019.”
In addition to the Orlando hotel, Hyatt this year has sold the 241-room Hyatt Regency Green Bay, 630-room Hyatt Regency San Antonio Riverwalk and 138-room Park Hyatt Zurich.