BHR News & Events

Braemar Hotels & Resorts announced that it has entered into a definitive agreement to sell the 410-room The Clancy in San Francisco for $115M and has received a $3.5M non-refundable earnest money deposit. The sale price represents a 5% capitalization rate on net operating income for the trailing 12 months ended August. The transaction is expected to close in November, subject to customary conditions. The buyer has the right to extend the closing for 30 days with an incremental $1M non-refundable deposit. The company provides no assurances that the sale will be completed on these terms or at all.

The company states: "The Board of Directors of Braemar Hotels & Resorts announced that it is initiating a process for the sale of the Company. The Board of Directors of the Company formed a Special Committee comprised solely of independent and disinterested directors to explore a range of strategic alternatives, aimed at maximizing both near- and long-term shareholder value. After reviewing various strategic options to maximize value for shareholders, the Board has determined that it is in the best interests of the Company and its shareholders to pursue a sale of the Company. Accordingly, the Company, together with its financial advisor, Robert W. Baird & Co. Inc., is initiating the sale process immediately, including soliciting interest from potential buyers and coordinating customary information sharing. The high-quality nature of the Company's portfolio has attracted multiple activist investors over the years. It is not believed that a luxury RevPAR lodging REIT like Braemar can flourish in today's market environment due to the historically low EBITDA multiple lodging REITs are achieving as well as the ongoing activism the Company has received. This same dynamic occurred with Strategic Hotel & Resorts, another luxury lodging REIT that after several years of undervaluation and activism, explored strategic alternatives and ultimately was sold in an all-cash transaction."

Braemar Hotels & Resorts (BHR) announced that it has closed on the previously announced sale of the 369-room Marriott (MAR) Seattle Waterfront in Seattle for $145M, or $393,000 per key. Including anticipated capital expenditures of $7M, the sale price represents an 8.1% capitalization rate on net operating income for the trailing 12 months ended May 31. In conjunction with the sale, the Company paid down approximately $88.4M of debt and retained approximately $50.8M of net proceeds after payment of transfer taxes and transaction costs.

Braemar Hotels & Resorts announced its plans to transition the 415-room Sofitel Chicago Magnificent Mile to a franchise structure. Under the franchise structure, the hotel will continue to be the Sofitel Chicago Magnificent Mile, but will be managed by Remington Hospitality under the existing terms of its master hotel management agreement with Braemar. In connection with the conversion, which is expected to be effective in May, Remington Hospitality will give offers for all employees employed on the conversion date to remain in their current positions as employees of a subsidiary of Remington Hospitality. There is no required property improvement plan associated with the conversion, but the company does plan to renovate the lobby, restaurant, and meeting space over the next two years.