DALLAS — Braemar Hotels & Resorts Inc. announced it has entered into a definitive agreement to acquire the 210-room Four Seasons Resort Scottsdale at Troon North. The acquisition is expected to close in the fourth quarter, subject to certain customary closing conditions. Because the acquisition is subject to certain customary closing conditions, the company can give no assurance that the transaction will be consummated by such date or at all.
“The acquisition of the Four Seasons Resort Scottsdale is an exciting opportunity for us to acquire a timeless, luxury resort ideally located in picturesque North Scottsdale,” said Richard J. Stockton, Braemar’s president and CEO. “This exquisite property fits perfectly with our strategy of owning high RevPAR luxury hotels and resorts and further diversifies our portfolio.”
The property is on 37 acres with rooms and amenities that include spa treatments at the 9,000-square-foot spa, a bi-level pool, and Southwest cuisine. The property also offers opportunities for outdoor adventure, including shuttle access to two golf courses, four pickleball, and two tennis courts, as well as the opportunities to hike, bike, or rock climb. In addition to the amenities, the resort benefits from its proximity to the city of Scottsdale, known for its boutiques, restaurants, history, art, and golf destinations.
Four Seasons Resort Scottsdale at Troon North was opened in 1999 and has had $20.7 million ($98,700 per key) of capital improvements since 2016. This included the renovation of all guestrooms, indoor meeting space, lobby, and food and beverage outlets. It has 210 guestrooms, including 22 suites that average 1,214 square feet in size, all with private patios or balconies. The property has multiple dining options including the 100-seat Talavera steakhouse, the 180-seat Proof cantina, the 55-seat Saguaro Blossom poolside restaurant, or the 100-seat Onyx Bar and Lounge. The property also has 35,900 square feet of total indoor and outdoor event space including three ballrooms and private meeting rooms including two boardrooms.
The total consideration for the acquisition is $267.8 million ($1.28 million per key). The acquisition is expected to be funded with existing cash on hand. No common equity will be issued to fund the acquisition. Of the total consideration, $250 million is allocated to the existing resort and represents a capitalization rate of 5.7 percent on hotel net operating income of $14.2 million and a 15.2x hotel EBITDA multiple, based on unaudited operating financial data provided by the sellers and forecasted financial results for 2022. The company expects to realize a stabilized yield of approximately 8.0 percent on its investment in the next three to five years. On a trailing 12-month basis as of August 30, 2022, the property achieved RevPAR of $423.20, with 48.5 percent occupancy and an average daily rate (ADR) of $873.24, according to unaudited operating financial data provided by the seller.