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US: Real estate investment trust (REIT) Braemar Hotels & Resorts has initiated a sales process of the company with immediate effect.
The board of directors of Braemar formed a special committee, comprised solely of independent and disinterested directors, to explore a range of options aimed at “maximising both near and long-term shareholder value”. A decision has been made to pursue a sale of the company.
Braemar’s portfolio of luxury hotels includes nine resort and five urban properties, operated under brands such as Ritz-Carlton, Four Seasons, Park Hyatt, Autograph Collection by Marriott, Hilton, and Sofitel.
Richard Stockton, CEO of Braemar Hotels & Resorts, said: “We’ve built a high-quality portfolio that is well-positioned to attract significant interest from private market buyers. With improving economic conditions, continued strength in industry performance, limited new room supply, and healthy consumer spending, I believe we are entering a favourable environment for a potential sale.”
In conjunction, Braemar and its external advisor Ashford Inc have negotiated and agreed on a company sale fee of $480 million. Ashford has received an advance payment of $17 million which will be credited against the sale fee in the event Braemar is sold prior to 1 July 2028.
Any buyer of the company will be required to assume the master project management agreement between Braemar and Premier Project Management, and the master hotel management agreement between the company and Remington Lodging & Hospitality.
Such documents may be completely cancelled by the buyer for an additional payment of $25 million to be paid to Ashford at the time of closing of any sale of the company.
Monty J. Bennett, chairman of the board of Braemar Hotels & Resorts, added: “When we created Braemar back in 2013, our hope was that Braemar’s high-quality portfolio and strong property performance would result in an attractive valuation, giving the company an attractive cost of capital for growth. While Braemar has traded at a similar multiple to its publicly-traded lodging REIT peers, the reality is that the public markets have not been friendly to lodging REITs, including Braemar.
“This fact, along with the constant shareholder activism that Braemar has experienced, has led us to conclude that a sale of the company is the best way to maximise value for shareholders. Hotel portfolios like the Braemar portfolio do not come to the market very often, and we believe the opportunity to acquire this iconic portfolio will attract significant buyer interest from around the world and result in an attractive valuation for shareholders.”
There is no deadline for completion of the sale, and there is no guarantee that a sale will take place.
Highlights:
• Braemar Hotels & Resorts has begun a formal sales process.
• The REIT owns 14 luxury hotels across resort and urban markets, under brands including Ritz-Carlton, Four Seasons, Park Hyatt, Hilton, and Sofitel.
• Braemar and external advisor Ashford Inc have agreed on a $480 million sale fee, with $17 million already advanced.
• CEO Richard Stockton said the portfolio is well positioned to attract private buyers, citing strong industry conditions and limited new supply.
