DALLAS—Ashford Hospitality Prime Inc. has entered into a definitive agreement to acquire the 266-room Ritz-Carlton Sarasota in Sarasota, FL for $171 million ($643,000 per key).
To fund the acquisition, the company plans to use cash on its balance sheet as well as either drawing on its revolving credit line or securing a non-recourse mortgage loan on the property.
As part of the transaction, the seller has agreed to provide a $5.5 million income guaranty to cover any decrease from 2017 hotel gross operating profit for up to three years, subject to certain conditions. In addition, Ashford Hospitality Prime is also acquiring a 22-acre plot of vacant land for $9.7 million that is being entitled for residential development adjacent to the golf course. The acquisition is expected to close in early April subject to customary closing conditions. Because the acquisition is subject to customary closing conditions, Ashford Hospitality Prime can give no assurance that the transaction will be consummated by such date or at all.
“The acquisition of the Ritz-Carlton Sarasota is an opportunity for us to acquire a luxury resort property with a premier location in the upscale and growing Sarasota market,” said Richard J. Stockton, Ashford Prime’s President and CEO. “This property fits perfectly with our strategy of owning luxury hotels and resorts and further diversifies our portfolio while also increasing the overall RevPAR of our portfolio, which is already the highest among our hotel REIT peers.”