Blackstone Real Estate Investment Trust is selling a 1,000-room resort hotel in the Texas Hill Country for $800 million in a deal that is being called the second-biggest hotel transaction since the pandemic and a major bet on the convention and leisure industry.

The JW Marriott San Antonio Hill Country Resort and Spa in San Antonio is being bought by Nashville, Tennessee-based Ryman Hospitality Properties Inc., which owns the Gaylord-branded hotels and resorts across the country.

Ryman’s acquisition of the JW Marriott in San Antonio gives the hospitality and entertainment REIT access to the seventh most-populous city in the nation that is one of of the top meeting and leisure markets in the United States, Ryman said in a statement.

The property at 23808 Resort Parkway is about 45 miles southwest of San Marcos, Texas, which is part of metropolitan Austin, and 20 miles northeast of downtown San Antonio. The deal marks Ryman's second major hotel acquisition in Texas since 2021. The REIT acquired The W Hotel in downtown Austin for $275 million in 2021.

The transaction symbolizes the growth of San Antonio, both as a spillover market from Austin and its role in the burgeoning Austin-San Antonio metroplex. Austin and San Antonio could eventually merge as one large metropolis similar to Dallas-Fort Worth within the next few years, according to the Greater Austin-San Antonio Corridor Council. The Corridor Council predicts the Austin-San Antonio region could grow from its current population of 4.5 million to as many as 7 million people by 2030.

Ryman Hospitality’s President and CEO Mark Fioravanti said the growth of San Antonio made the JW Marriott an ideal acquisition target.

"Located in an attractive and growing market with no emerging competitive supply, this beautiful resort is a natural complement to our existing Gaylord Hotels portfolio and offers significant opportunities to serve the group and leisure sides of our business,” Fioravanti said in the statement.

Ryman plans to continue to operate the resort under the JW Marriott flag. The resort opened in 2010 on 640 acres in the Texas Hill Country and features 1,002 rooms, 268,000 square feet of indoor and outdoor meeting and event space, spa, food and beverage outlets and two 18-hole golf courses. 

Blackstone expects the sale to generate $275 million in profit for the REIT since it bought the property in 2018, according to the statement. Ryman's purchase price of $800 million represents the largest single-asset sale for a hotel property since the pandemic with only the sale of the Diplomat Beach Resort in south Florida for $835 million being higher, according to the Wall Street Journal.

Investors are bullish on the Austin-San Antonio metroplex, according to Shravan Parsi, president and CEO of American Ventures, an Austin-based commercial real estate investor.

“[San Antonio] is an independent thriving market on its own. However, investors are very bullish about the Austin-San Antonio megaplex that’s being created now and the region’s growth story,” Parsi told CoStar News.

Parsi added while Austin has done “an excellent job in attracting high power tech companies” and millennials who are attracted to the city’s lifestyle, San Antonio is doing its part in playing catch-up.

“Austin’s growth story is hard to repeat elsewhere, but San Antonio is catching up by promoting its own story of being a stable market with more affordable homes, lower cost of living and access to cheaper real estate,” Parsi said.

Parsi cited recent investments in downtown San Antonio and the Pearl District as examples of investors parking a lot of money in the Alamo City.

Elijah Stout, director of Apollo Funding Partners in Austin, said investing in San Antonio provides investors with greater value for their money, when compared to investing in the Texas capital.

“Almost everyone, investor or otherwise, would prefer to be in Austin over San Antonio, given pricing was the same,” Stout told CoStar News. “That said, San Antonio is still a solid economy with room to grow. On the investment side, the thesis is you’re buying at a better basis and so long as it remains cheaper than Austin it’s a good value play.” 

Blackstone and Ryman expect the deal to close in the second or third quarter.

Ryman's financial adviser is BofA Securities, and its legal counsels are Bass, Berry & Sims PLC and Greenberg Traurig. BREIT's financial advisers on the deal include Citigroup Global Markets Inc., Eastdil Secured, JPMorgan Securities LLC, Santander US Capital Markets LLC, Scotiabank, Sumitomo Mitsui Banking Corp. and Wells Fargo, while its legal counsel is Simpson Thacher & Bartlett LLP.