Maryland-based REIT Host Hotels & Resorts has closed on the sale to its partners of its 33-percent stake in a European joint venture.
According to the Trust, the gross asset value of its interest is approximately €700 million and equates to an EBITDA multiple of 17x on 2018 forecasted results. After accounting for fund-level debt, net proceeds to the company will be €435 million.The REIT will use a portion of the proceeds to repay an approximately €207 million draw on the credit facility, according to the company. It noted the €435 million net proceeds represent a multiple of 42x 2018 forecasted GAAP net income from the joint venture, excluding the gain on sale. (The difference between net income and EBITDA is interest expense, depreciation, and tax of €9 million, €19 million and €3 million, respectively.)
“The closing of this sale represents the successful completion of one of my key initiatives set early on in my tenure as CEO to focus our attention back to the U.S., where we have the greatest scale and competitive advantage,” said James F. Risoleo, president and CEO, in a statement. “We can now focus our attention on our investment activity in the U.S., as less than 2 percent of our EBITDA will come from hotels outside the country with only two hotels in Canada and three hotels in Brazil. The proceeds continue to strengthen our investment-grade balance sheet and enhance our ability to make strategic investments that ultimately drive long-term value creation for our stockholders.”
Host has made some big-name domestic buys this year, including the 301-room Andaz Maui at Wailea Resort, 668-room Grand Hyatt San Francisco and 454-room Hyatt Regency Coconut Point Resort and Spa for $1 billion.