Host Hotels & Resorts Sells Iconic Properties for $1.1 Billion
This week, Host Hotels & Resorts made headlines with the announcement of its sale of two luxurious properties: the Four Seasons Resort Orlando at Walt Disney World and the Four Seasons Resort and Residences Jackson Hole. Both properties were acquired by an undisclosed buyer for a staggering $1.1 billion.
A Look at the Four Seasons Resort Orlando
Opened in 2014, the Four Seasons Resort Orlando is a crown jewel in the local hospitality landscape, boasting the distinguished 5-Diamond status, a rarity in Orlando. Nestled on a sprawling 289 acres, the resort features an impressive 10100 Dream Tree Blvd address and offers guests unparalleled access to the magic of Disney, with complimentary transport to four Disney theme parks and Disney Springs.
This luxury retreat is not just a place but a comprehensive experience. It includes:
- An 18-hole golf course and golf club
- Five sparkling pools
- Three well-maintained tennis courts
- A 13,000-square-foot spa
- An elaborate 5-acre water park known as Explorer Island, designed to delight guests of all ages.
The Acquisition History
Host Hotels & Resorts, a leader in the ownership of luxury and upper-upscale hotels in the United States, acquired the Orlando resort in 2021 for $610 million. This purchase set a per-room record for Orlando-area hotels at approximately $1.37 million per key. The Wyoming property, purchased in 2022 for $315 million, also brought a remarkable return, representing over $2 million per key.
The recent sale not only marks an incredibly profitable venture for Host Hotels, but it also yields an estimated 11% rate of return for the REIT, signaling strong financial maneuvering in both acquisitions and sales.
Insights from Leadership
James F. Risoleo, the CEO of Host Hotels & Resorts, highlighted the strategic nature of these transactions. "The sale of these two iconic properties represents another important step in advancing our capital allocation strategy," he stated. He expressed satisfaction with the ability to monetize these recently acquired hotels at an attractive profit, reinforcing the company’s ongoing commitment to creating value for shareholders.
Market Context
Industry experts have varied opinions regarding the implications of this sale on the broader hospitality market. Paul Sexton, vice president of HREC Advisory, pointed out that the Four Seasons deal is somewhat atypical compared to the overall Orlando market. "It’s pretty interesting that they got that kind of return, given that most of the hotels in Orlando, other than luxury hotels, have only been maintaining their value," Sexton noted.
Furthermore, the sale does not include the ongoing condo development within the Four Seasons Private Residences at Disney’s Golden Oak community. Host Hotels had previously acquired land adjacent to the hotel for $30 million in 2021, initiating a partnership with Disney to expand this luxury condo community, which has already achieved over $166 million in sales across 20 units since the completion of the condo tower last November.
Looking Ahead
As these transactions unfold, they paint a picture of a dynamic and evolving hospitality market, particularly in the luxury segment. The focus on capital allocation and strategic growth by companies like Host Hotels & Resorts will likely continue to shape the landscape of luxury accommodations in the United States.
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