Ares Sells $270M Stake in Denver-Area Hotel Project
- Sep 18, 2018
A joint venture partner on the development of the 2 million-square-foot Gaylord Rockies Resort & Convention Center in Aurora, Colo., is planning to cash in on its investment. Global alternative asset manager Ares Management recently inked a deal to sell its interest in the $824 million project to Ryman Hospitality Properties Inc. and RIDA Development Corp., the two other partners in the joint venture, for $270 million.
The construction of the Gaylord Rockies kicked off in 2016 on an 85-acre site at 6700 N. Gaylord Rockies Blvd., located roughly 20 miles west of downtown Denver. In addition to 1,500 premier guestrooms, the Marriott International-managed resort destination will offer 485,000 square feet of flexible meeting space, including a 175,000-square-foot exhibit hall, as well as food and beverage outlets and a $25 million water park.
“Our Gaylord Rockies investment continues Ares’ longstanding track record of developing best-in-class convention and resort properties across major markets in the United States and our long-term strategy of being a meaningful investor in developments that meet the needs of local communities,” Andrew Holm, partner in the Ares Real Estate Group, said in a prepared statement.
Ryman will pay funds managed by affiliates of Ares Management LP and its affiliates $242 million in cash for an additional 27.3 percent interest in the joint venture, leaving the REIT with a 62.3 percent ownership and the positions of majority owner and managing member. RIDA will pay Ares $28 million to boost its stake in the partnership to 37.7 percent, and the company will assume the role of co-managing member, with the task of spearheading development projects.
The word is out
The transaction is on track to close by the end of 2018. The Gaylord Rockies, which is being built by general contractors Mortenson Construction and WELBRO Building Corp. under a maximum $530 million contract, is scheduled to make its official debut in December of this year. Already, the hotel and convention center property is garnering a significant amount of attention—and commitments. As noted during Ryman’s second quarter 2018 earnings conference call on Aug. 7, the Gaylord Rockies booked 134,000 gross group room nights in the second quarter.
“When this stunning hotel opens in December, the Rockies will have well over 1 million room nights on the books for all future years. And I think you’ll be hard pressed to find another large group hotel that has opened over the last few years with as many group room nights on the books in contract form as the Gaylord Rockies has,” Colin Reed, chairman & CEO of Ryman Hospitality Properties Inc., said during the REIT’s earnings call.
Image courtesy of Marriott International