Hyatt to Shed 3 Properties in $1B Deal

The sale of Grand Hyatt San Francisco and two resorts to Host Hotels is tied to the company’s sell-down and asset-recycling programs. Hyatt will continue to manage all three assets.

Mark Hoplamazian
Mark Hoplamazian, Hyatt Hotels president & CEO

Hyatt Hotels Corp. has agreed to sell to Host Hotels & Resorts the 668-key Grand Hyatt San Francisco, the 301-key Andaz Maui at Wailea Resort and the 454-key Hyatt Regency Coconut Point Resort and Spa, Bonita Springs, Fla., for about $1.0 billion, Hyatt announced.

Hyatt will continue to manage the three hotels under long-term management agreements.

The transaction is expected to close near the end of March. The closing with respect to the Grand Hyatt San Francisco is conditioned on completing the partition of the hotel property from the adjacent retail property, also owned by Hyatt, according to a Form 8-K filed by the company.

Andaz Maui at Wailea Resort, Hawaii
Andaz Maui at Wailea Resort, Hawaii

The Andaz Maui and Grand Hyatt San Francisco reflect a combined attributed sale value of about $800 million and reportedly form part of Hyatt’s ongoing $1.5 billion permanent sell-down program. The sale of the Hyatt Regency Coconut Point, for an attributed value of about $200 million, completes Hyatt’s 2017 commitment to be a “net seller” of assets under its ongoing asset-recycling program.

The completion of this transaction not only allows Hyatt to maintain our brand presence in these key markets with great brand representation, but also supports the execution of our recently announced initiative to reduce real-estate ownership as part of our broader capital strategy to unlock shareholder value,” Hyatt Hotels President & CEO Mark Hoplamazian said in a prepared statement.

Through a spokesperson, Hyatt declined to comment further on the transaction or on the asset-recycling program.

However, Hyatt’s most recent annual report, for calendar/fiscal 2017, stated: “We recently committed to supplement our asset recycling strategy with a targeted reduction in our owned real estate portfolio that is expected to generate approximately $1.5 billion in gross cash proceeds by the end of 2020…. These anticipated dispositions will be in addition to the execution of our asset recycling strategy—selling certain hotels, maintaining presence in markets by entering into new management or franchise agreements, and re-investing sale proceeds into new hotels and other growth opportunities…. This asset recycling strategy has allowed us to grow and build our brands while improving the quality of our owned portfolio over time.”

Recycling, shmecycling! Growth continues apace

One key sector where Hyatt has definitely been growing is its Hyatt Place and Hyatt House brands, where by mid-2017 the company had opened 19 such hotels, totaling 2,686 keys. Locations of new Hyatt Place and Hyatt House properties in the U.S. included Austin; Boise, Idaho; and Chapel Hill, N.C., while international locations included Edmonton, Alberta; Rameshwaram, India; and two locations in China.

Images courtesy of Hyatt Hotels Corp.