MGM Resorts has reached an agreement to purchase CityCenter in Las Vegas and sell the Aria and Vdara Hotels on the site. Here’s a look at that transaction and more.
MGM Resorts to purchase CityCenter; sell Aria and Vdara
MGM Resorts International has entered into a definitive agreement to purchase Infinity World Development Corp’s 50% interest in CityCenter Holdings LLC for $2.125 billion. The purchase price represents an implied valuation of $5.8 billion based on net debt of $1.5 billion, after giving effect to the recently closed sale of a two-acre parcel. The agreement will make MGM Resorts the 100% owner of CityCenter on the Las Vegas Strip, which comprises Aria Resort & Casino and Vdara Hotel and Spa.
MGM Resorts has also entered into a definitive agreement with Blackstone to monetize the Aria and Vdara real estate assets, pending the close of the equity purchase agreement between MGM Resorts and Infinity World. Under terms of the agreement, funds managed by Blackstone will acquire the Aria and Vdara real estate for $3.89 billion in cash, which represents a multiple of 18.1x rent. Following the acquisition, both properties will be leased to MGM Resorts for initial annual rent of $215 million.
Regarding the real estate agreement with Blackstone, Bill Hornbuckle, CEO/president, MGM Resorts, said, “This transaction demonstrates the unprecedented premium value of our real estate assets and is a testament to Aria and Vdara’s status as premier destinations on the Las Vegas Strip. We expect to continue executing on our asset-light strategy and utilizing the proceeds from our real estate transactions to enhance our financial flexibility and secure new growth opportunities.”
Tyler Henritze, head, U.S. acquisitions Americas for Blackstone Real Estate, said, “This transaction reflects our high conviction in Las Vegas and our strong partnership with MGM Resorts. CityCenter is a best-in-class resort and complementary addition to our portfolio of high-quality assets on the Strip.”
The transactions are expected to close in the third quarter, subject to certain closing conditions. The closing of the Infinity World transaction is not contingent on the closing of the transaction with Blackstone.
PJT Partners is serving as exclusive financial advisor and Weil, Gotshal & Manges LLP is serving as legal counsel to MGM Resorts on both transactions. Moelis & Company LLC is serving as exclusive financial advisor and Paul Hastings LLP is serving as legal counsel to Infinity World. Simpson Thacher & Bartlett LLP is acting as legal counsel to Blackstone.
Nine-property portfolio sold for $225M
Marcus & Millichap, a leading commercial real estate brokerage firm specializing in investment sales, financing, research and advisory services, has brokered the sale of nine hospitality properties across eight states, amassing 1,55 million sq. ft. with a total value of approximately $225 million, as part of a previously announced alliance.
The buyer, Lockwood Development Partners, plans to repurpose these properties and create multi-dimensional assets that will help stimulate the economy and provide essential resources and opportunities to the veteran and senior communities. The repurposed, multifaceted assets will feature a rebranded, eco-friendly, and sustainable hotel operation, affordable multifamily housing and “ghost kitchens,” where local vendors partner with Uber Eats to do business without the upkeep costs of a brick-and-mortar restaurant. In conjunction with the Veteran Affairs’ Mission Act, the properties will also serve as a resource for veterans to receive permanent housing, physical and mental assistance, and other support programs through SarahCare, an organization dedicated to providing resources for seniors.
The properties are:
- Crowne Plaza, Memphis, TN, 319 rooms
- Crowne Plaza, Austin, TX, 293 rooms
- Clarion Hotel, Orlando International Airport, 335 rooms
- Crowne Plaza, Houston, 243 rooms
- Crowne Plaza, Dayton, OH, 283 rooms
- Crowne Plaza, Reading, PA, 259 rooms
- Garden Plaza, Marietta, GA, 218 rooms
- Former Marriott, Jackson, MS, 303 rooms
- Crowne Plaza, Tulsa, Ok, 286 rooms
Marcus & Millichap’s brokers of record in Florida, Georgia, Mississippi, Ohio, Oklahoma, Pennsylvania, Tennessee and Texas are, respectively, Ryan Nee, John Leonard, Mickey Davis, Michael Glass, Mark McCoy, Sean Beuche, Jody McKibben and Timothy Speck.
Host Hotels acquires Baker’s Cay Resort Key Largo for $200M
Host Hotels & Resorts Inc. has acquired the fee simple interest in the 200-room Baker’s Cay Resort Key Largo, Curio Collection for approximately $200 million in cash.
The purchase price represents an estimated 6.2% capitalization rate and a 14.5x EBITDA multiple based on 2021 property forecasts.
Situated on 13 acres of beachfront land on Key Largo’s Gulf Coast, the property is located 65 miles from Miami International Airport. It offers 26,000 sq. ft. of meeting space, including a 6,900-sq.-ft. event lawn and four food and beverage outlets. Amenities include a swimmable private beach, spa, salon, dock, fitness center and two outdoor pools.
DiamondRock completes disposition of Lexington Hotel in NYC
DiamondRock Hospitality Company has completed the disposition of the 725-room Lexington Hotel in New York City for $185.3 million.
Including the company’s projected capital expenditures, the sale price represents a 14.2x multiple on 2019 hotel EBITDA and a 5.4% capitalization rate on 2019 hotel net operating income. The company intends to redeploy the net proceeds from the sale to acquire high-growth experiential resort and urban lifestyle hotels aligned with its investment strategy.
DoubleTree by Hilton Hotel Anaheim—Orange County acquired
AWH Partners LLC and funds managed by a subsidiary of Apollo Global Management Inc. have acquired DoubleTree by Hilton Hotel Anaheim—Orange County. As a result of the deal, Spire Hospitality has taken over management of the property from Hilton. The financial terms of the transaction were not disclosed.
The 461-key property has a fitness center, room services, a business center, an outdoor pool and a tennis court. There are several dining options on the property, including 1Hundred, a lobby bar with big screen sports entertainment; KoffeeKITCHEN, an urban kitchen serving locally sourced produce and Starbucks coffee; and Trofi Restaurant & Bar, which serves fine California cuisine.
DoubleTree by Hilton Hotel Anaheim—Orange County has 31,982 sq. ft. of indoor and outdoor event space across two floors and 20 meeting rooms in total.
TPG Hotels, Resorts & Marinas acquires Sherburne Inn in Nantucket
TPG Hotels, Resorts & Marinas has acquired the historic Sherburne Inn in Downtown Nantucket.
The Sherburne Inn has eight uniquely designed upscale rooms. All beds at the property are covered in luxury sheets ironed by hand. Each bathroom is appointed with plush towels, a suite of Beekman spa products which are luxurious and completely sustainable, and hairdryers. In addition, each room has a TV with cable, complimentary WiFi and a Keurig personal coffee machine.
The Sherburne Inn adds to the firm’s other properties on Nantucket, which in The Veranda House, The Regatta Inn, The Chapman House and Arbor Cottage, which collectively are known as the Nantucket Resort Collection.
Kirkwood Collection adds Seven Gables Inn on Monterey Bay
Kirkwood Collection has acquired the Seven Gables Inn on Monterey Bay in California, expanding its portfolio to six properties.
Seven Gables Inn was built in 1886 as one of a parade of stately Victorian mansions located along the oceanfront of the Monterey Peninsula. In 1982, the Flatley family reimagined the mansion into a luxury inn. Over the decades, the Flatleys acquired adjacent parcels growing the hotel to 25 keys, including two guest cottages consisting of multi-bedroom suites, all with unobstructed ocean views and coastal mountain views beyond.
Courtyard Atlanta Airport West acquired by Alpental Capital
Alpental Capital, a Denver-based hotel investment group, has acquired the Courtyard Atlanta Airport West and has selected Providence Hospitality Partners to manage the hotel.
The 128-room hotel completed an extensive $1.6 million guestrooms renovation in 2018-2019, and Alpental has continued capital improvements planned for the property to further enhance the guest experience. In addition to the recently renovated guestrooms, the four-story hotel features an airport shuttle, outdoor pool, Bistro & Bar, 24-hour fitness center, 24-hour business center and complimentary WiFi and parking. The property also provides more than 3,000 sq. ft. of meeting space that can accommodate up to 130 people, along with an executive boardroom.
Hunter Hotel Advisors brokers sale of Home2 Suites by Hilton Savannah Airport
Led by Mayank Patel, Hunter Hotel Advisors represented BPR Properties in the sale of the Home2 Suites by Hilton Savannah Airport in Pooler, GA. The buyer was a large private equity group focused on adding high RevPAR assets to its growing select-service platform.
The property is close to Savannah/Hilton Head International Airport (SAV) and Downtown Savannah.
Shamin Hotels purchases two Virginia Beach hotels
Shamin Hotels of Chester, VA, has acquired the 120-room Hampton Inn Virginia Beach Oceanfront North and the 147-room Best Western Sandcastle Hotel, both located on the Virginia Beach boardwalk.
The recently renovated Hampton Inn is located at the center of the boardwalk adjacent to Neptune Park and the Hilton Virginia Beach Oceanfront, both also owned by Shamin Hotels, while the Best Western is located adjacent to the famous Virginia Beach pier. With these acquisitions, Shamin Hotels now owns six hotels at the Virginia Beach Oceanfront.