MCLEAN, VA. — Hilton Worldwide Holdings Inc. (NYSE: HLT) will acquire five landmark hotel properties with proceeds from its recent $1.95 billion sale of the Waldorf Astoria New York to Anbang Insurance Group Co. Ltd., a Chinese company.
The properties include Hilton Orlando Bonnet Creek in Orlando, Fla. (1,001 rooms);
Waldorf Astoria Orlando in Orlando, Fla. (498 rooms); The Reach, A Waldorf Astoria Resort in Key West, Fla. (150 rooms); Casa Marina, A Waldorf Astoria Resort in Key West, Fla. (311 rooms); and Parc 55 in San Francisco (1,024 rooms).
The Parc 55 will be a new addition to the Hilton Hotels & Resorts brand, which Hilton Worldwide will manage. Hilton Worldwide currently manages the other acquired hotels.
The five hotels are expected to be part of a 1031 like-kind exchange. The total purchase price of these five hotels of $1.76 billion represents approximately 13 times the midpoint of the five properties’ combined full-year projected 2015 adjusted EBITDA of between $132 million to $138 million.
As part of its long-term relationship with Anbang, Hilton Worldwide will continue to operate the Waldorf Astoria New York under a 100-year management agreement. Anbang also plans to complete a major renovation to restore the property to its historic grandeur.
“These transactions will enable us to unlock the embedded value of the Waldorf Astoria New York and acquire great institutional-quality assets that we expect will drive significant incremental value for the company,” says Christopher Nassetta, president and CEO of Hilton Worldwide. “Our relationship with Anbang will ensure the Waldorf Astoria New York will continue to be a marquee hotel for the Waldorf brand long into the future, and will enable Hilton Worldwide and Anbang to build on the hotel’s rich legacy and traditions.”
McLean, Va.-based Hilton Worldwide plans to close on the purchase of the five hotels this month, and use the balance of the proceeds of the sale of the Waldorf Astoria New York net of prorations, adjustments and transaction expenses, estimated to be approximately $100 million, to purchase additional assets within the next six months.
Eastdil Secured advised Hilton Worldwide on the sale of the Waldorf Astoria New York and the hotel acquisitions.
The stock price of Hilton Worldwide closed at $27.46 per share on Tuesday, Feb. 10, up from $21.41 a year ago.
— Danielle Everson