Dive Brief:
- Braemar Hotels & Resorts has sold the luxury Pier House Resort & Spa in Key West, Florida, to global investment firm Sixth Street, for $190 million, according to a Thursday news release. Sixth Street completed the transaction in partnership with Riller Capital.
- The 142-key oceanfront resort is situated on 5 acres at the gateway of Key West’s main thoroughfare, Duval Street, per the release. The property offers two dining venues, a full-service spa, a fitness center, a pool, private beach frontage and approximately 3,000 square feet of meetings and events space.
- The transaction comes after Braemar sold the Park Hyatt Beaver Creek Resort & Spa in Avon, Colorado, to Sixth Street for $176 million in May. The sales are part of Braemar’s strategy to deleverage its portfolio amid a restructuring of its business.
Dive Insight:
With Braemar’s sale of Pier House, along with other recent property sales, the company continues “to make meaningful progress on our management spin-out and transition to a self-managed REIT,” CEO Richard Stockton said in an Aug. 5 earnings report.
In June, Braemar ended a monthslong strategic review process that launched last August. The company announced plans to terminate its advisory agreement with Ashford Inc. and its affiliates and become a self-managed real estate investment trust, though the decision has been contested by Braemar’s largest shareholder, Al Shams Investments Limited.
Over the last year, Braemar has sold the Marriott Seattle Waterfront in Seattle for $145 million, in addition to the Park Hyatt Beaver Creek, as it worked to deleverage its portfolio and sharpen its focus on the luxury hotel sector, Stockton previously said. In July, the company closed on the sale of The Ritz-Carlton Sarasota in Florida as well as the Hotel Yountville and the Bardessono Hotel and Spa, both in Yountville, California, for a total of $437.5 million, per the earnings report.
As part of Braemar’s business transition, the company plans to maintain a portfolio of approximately six to eight luxury properties across the U.S. and the Caribbean, the company previously said. During the second quarter, the majority of Braemar’s luxury portfolio “delivered exceptional property-level performance,” Stockton said in the earnings report.
As for the Pier House sale, the investment aligned with Sixth Street’s strategy to identify “high-quality hospitality assets where we can drive long-term value,” Aman Gupta, principal at Sixth Street, said in the Thursday release.
“We believe Pier House represents an opportunity to acquire a historic luxury resort in one of the country’s most supply-constrained and sought-after tropical leisure markets,” Gupta added.
Industrywide, luxury hotel sales are set to surge due to strong fundamentals and strengthening capital markets, according to a June report from JLL.
