Saturday, August 17, 2024 Today, Hyatt Hotels Corporation declared the finalized sale of the 1,641-room Hyatt Regency Orlando and an adjoining 45-acre tract to entities linked with RIDA Development Corporation and a real estate fund managed by Ares Management (“Ares”). The transaction, valued at roughly $1.07 billion, also sees Hyatt maintain a long-term management role under its Hyatt Regency brand.
Additionally, Hyatt has preserved $265 million in non-controlling preferred equity and extended $50 million in seller financing for the land parcel. This transaction is a component of Hyatt’s broader strategy to divest directly owned properties and channel these funds into less capital-intensive ventures that foster accelerated growth. This approach has exceeded Hyatt’s target, initially set in 2021, to dispose of assets worth $2 billion; the company has now amassed $2.
6 billion in gross proceeds from these sales over the past three years, achieving a 13.3x earnings multiple. The Hyatt Regency Orlando ranks as the company’s fourth largest hotel worldwide, boasting 1,641 rooms and 315,000 square feet of adaptable event space.
The hotel annually hosts over a million guests and attendees, thanks to its advantageous location near top Orlando attractions and its direct link to the Orange County Convention Center, the U.S.’s second-largest convention facility.
Orlando’s robust tourism sector renders it a critical locale for Hyatt, with RIDA and Ares planning substantial investments in renovations to elevate the hotel’s facilities and guest services. Furthermore, RIDA and Ares, known for their expertise in developing expansive convention venues, have agreed to collaborate with Hyatt on constructing a new Grand Hyatt hotel on the adjacent land. This agreement, pending certain prerequisites, will see the establishment of a long-term management deal between Hyatt and the RIDA and Ares affiliate.
The anticipated Grand Hyatt Orlando, slated for phased development, aims to secure all necessary governmental permissions in the coming years. This ambitious project is poised to significantly expand Hyatt’s footprint in Orlando, providing a combined total of over 4,000 rooms at the convention center’s location and reinforcing Hyatt’s strategic position in this highly sought-after market. Ira Mitzner, President & CEO of RIDA Development Corp .
, added, “We are extremely pleased to be partnering again with Ares in this historic transaction. We are excited to work with Hyatt to grow and enhance the Orange County Convention Center (OCCC) district and create a guest experience unparalleled for both group and leisure customers. We look forward to collaborating on a visionary public-private partnership with the State of Florida, Orange County, the OCCC, and all community stakeholders.
” Andrew Holm, Partner and Ares’ Co-Head of U.S. Real Estate Investments , added, “Hyatt has established Hyatt Regency Orlando as a landmark of its community’s vibrant business and leisure activity, and we are excited to work closely with the Hyatt team and advance our partnership with RIDA to realize the potential of this important location.
We look forward to leveraging our extensive investment experience undertaking large-scale, complex projects as we seek to create long-term value in this attractive market.”.
