CHICAGO, Illinois—Hyatt Hotels Corporation announced that an affiliate of Hyatt has completed the sale of the 1,641-room Hyatt Regency Orlando and adjacent 45 acres of land to affiliates of RIDA Development Corporation and an Ares Management Real Estate fund for approximately $1.07 billion while retaining a long-term management agreement under the Hyatt Regency brand. In connection with the transaction, Hyatt retained $265 million of non-controlling preferred equity and provided an additional $50 million of seller financing for the adjacent 45-acre parcel.
The sale of Hyatt Regency Orlando is part of Hyatt’s capital allocation strategy to sell owned hotels and reinvest proceeds in platforms that accelerate growth and exceed Hyatt’s expanded $2 billion asset-disposition commitment announced in 2021. Over a three-year period, Hyatt has now realized $2.6 billion of gross proceeds, net of acquisitions, at a 13.3x multiple.
Hyatt Regency Orlando, the fourth largest Hyatt hotel globally by room count, has 1,641 rooms with 315,000 square feet of event space. The hotel is positioned in the market given its location near Orlando attractions and direct connection to the Orange County Convention Center. The city’s tourism industry makes Orlando a key market, and RIDA and Ares intend to invest additional capital in a renovation plan that will focus on guestrooms and other amenities.
Additionally, with experience developing large-scale convention properties, RIDA and Ares have entered into a development agreement with Hyatt for a new Grand Hyatt hotel on the 45 acres of land adjacent to Hyatt Regency Orlando. Upon the satisfaction of certain conditions, Hyatt and an affiliate of RIDA and Ares will enter into a long-term management agreement for the hotel.
Mark S. Hoplamazian, president and CEO, Hyatt, said, “The sale of Hyatt Regency Orlando represents the largest single-asset sale in Hyatt history. We are thrilled to be working with RIDA and Ares on this transaction, and in collaboration with these world-class developers, we will continue driving the success of Hyatt Regency Orlando and thoughtfully expand our brand footprint in the most-visited destination in the United States with a new Grand Hyatt hotel.”
RIDA and Ares anticipate pursuing necessary approvals and other governmental support over the next several years for the planned Grand Hyatt Orlando, which is expected to have approximately 2,500 rooms and be developed in multiple phases. The development of Grand Hyatt Orlando is positioned to create a combined total of more than 4,000 guestrooms across Hyatt Regency Orlando and Grand Hyatt Orlando at the Orange County Convention Center.
Ira Mitzner, president and 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 co-head of U.S. real estate investments, Ares, 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.”
