Apparently Washington, D.C., is not New York.
Hyatt Hotels Corporation announced it sold its Park Hyatt hotel in D.C. to a venture comprised of Westmont Hospitality Group and Thomas Tan, a member of the Bestford Hospitality Group. The sale price of the 216-room hotel was approximately $100 million or $463,000 per key.
Word is the buyer plans to spend approximately $5.5 million in additional capital expenditures over the next three years. Hyatt will continue to manage the hotel under a new management agreement. The hotel originally opened in 1986 and was last renovated in 2006.
“We are delighted to expand our relationship with Westmont,” said Stephen Haggerty, global head, capital strategy, franchising and select service for Hyatt. “This transaction is consistent with our asset recycling strategy and allows Hyatt to retain its brand and management presence in Washington D.C., an established market with high barriers to entry.”
While the sale is not hugely surprising, it is curious that Hyatt is selling one of its luxury properties shortly after it acquired another.
In August, Hyatt acquired 100 percent of the 210-room Park Hyatt New York for approximately $390 million.
Haggerty's comment about the deal was strikingly similar to what he said about the D.C. property. “With its prominent location in one of the world’s most important markets and its elegant aesthetic, Park Hyatt New York will have a meaningful impact on the visibility and reputation of the Park Hyatt brand,” said Steve Haggerty, global head of capital strategy, franchising and select service, Hyatt Hotels Corporation. “Park Hyatt New York is an excellent example of Hyatt using the strength of its balance sheet to enter markets like New York that have high barriers to entry, and acquiring whole ownership of the hotel gives us the flexibility to recycle the asset at the appropriate time.”
Meanwhile, Hyatt is full on in sell mode for many select-service hotels. Last month, Hyatt sold a 38-hotel portfolio of Hyatt House and Hyatt Place hotels to Lone Star Funds for around $590 million.