BETHESDA, Md., Feb. 19, 2019 -- Host Hotels & Resorts, Inc. (NYSE: HST), the nation’s largest lodging real estate investment trust (the "Company"), today announced that on February 14, 2019, it acquired the fee simple interest in the 429-room 1 Hotel South Beach in Miami Beach, Florida for approximately $610 million.
This iconic and irreplaceable luxury resort reopened in 2015 following a transformational $300 million repositioning renovation and is rated in the top-10 U.S. hotels by Conde Nast Traveler and recently rated the #1 hotel in Miami Beach by TripAdvisor.
Based on the 2019 budget, the purchase price equates to an EBITDA multiple of 13x.(1)
The 1.1 million square foot, LEED-certified resort has a premium location in the vibrant South Beach area of Miami Beach and over 600 linear feet of ocean frontage with direct beach access. The resort is the centerpiece of a mixed-use complex that features an additional 155 luxury branded 1 Homes condominium units; all owners of these units may participate in a rental program through the resort.
1 Hotel South Beach features 160,000 square feet of dynamic and flexible meeting space, eight food and beverage outlets, spa, gym, four elevated pools with ocean views and 23,000 square feet of luxury retail space.
James F. Risoleo, President and Chief Executive Officer, said, "This is an extraordinary resort of an iconic and irreplaceable nature located on prime, beachfront real estate in the South Beach area of Miami Beach. The hotel has no near-term capex needs and carries a RevPAR of over $488, making it one of the top three in our portfolio. Our ability to convert high EBITDA multiple asset sales of non-core, high-capex and profitability challenged hotels into a resort of this caliber, materially improving our overall portfolio, is an excellent example of disciplined and prudent capital recycling."
The aggregate consideration of approximately $610 million includes the issuance of Class A Common Units of Host Hotels & Resorts, L.P. with an aggregate value of approximately $2.6 million and Class G Preferred Units with an aggregate value of approximately $23.4 million.
(1) The purchase price equates to a multiple of 20x 2019 budgeted GAAP net income. The difference between budgeted net income and EBITDA is depreciation expense of $16 million.
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