Braemar Hotels & Resorts Inc. has entered into a definitive agreement to acquire the 210-room Four Seasons Resort Scottsdale at Troon North in Scottsdale, AZ. The acquisition is expected to close in the fourth quarter, subject to certain customary closing conditions. Because the acquisition is subject to certain customary closing conditions, the company can give no assurance that the transaction will be consummated by such date or at all.
“The acquisition of the Four Seasons Resort Scottsdale is an exciting opportunity for us to acquire a timeless, luxury resort ideally located in picturesque North Scottsdale,” said Richard J. Stockton, president/CEO, Braemar. “This exquisite property fits perfectly with our strategy of owning high RevPAR luxury hotels and resorts and further diversifies our portfolio.”
The property is set on 37 acres featuring adobe-inspired rooms situated among saguaro cacti and views of the iconic Pinnacle Peak. Amenities include locally inspired spa treatments at the 9,000-sq.-ft. spa, a bi-level pool and authentic Southwest cuisine. The property also offers shuttle access to two world-class golf courses, as well as four pickleball and two tennis courts, and opportunities to hike, bike or rock climb surrounding hills.
Four Seasons Resort Scottsdale at Troon North was opened in 1999 and has benefited from $20.7 million ($98,700 per key) of capital improvements since 2016. This included the renovation of all guestrooms, indoor meeting space, the lobby and food and beverage outlets. It has 210 guestrooms, including 22 suites that average 1,214 sq. ft. in size, all with private patios or balconies.
The total consideration for the acquisition is $267.8 million ($1.28 million per key). The transaction is expected to be funded with existing cash on hand. No common equity will be issued to fund the acquisition. Of the total consideration, $250 million is allocated to the existing resort and represents a capitalization rate of 5.7% on hotel net operating income of $14.2 million and a 15.2x hotel EBITDA multiple, based on unaudited operating financial data provided by the sellers and forecasted financial results for this year. The company expects to realize a stabilized yield of approximately 8.0% on its investment in the next three to five years. On a trailing 12-month basis as of Aug. 30, the property achieved RevPAR of $423.20, with 48.5% occupancy and an ADR of $873.24, according to unaudited operating financial data provided by the seller.