Ashford Hospitality Prime entered into a definitive agreement to acquire the 266-room Ritz-Carlton Sarasota in Sarasota, Fla. for $171 million ($643,000 per key). To fund the acquisition, the company plans to use cash on its balance sheet as well as either draw on its revolving credit line or secure a non-recourse mortgage loan on the property. The acquisition is expected to close in early April subject to customary closing conditions.
As part of the transaction, the seller has agreed to provide a $5.5 million income guaranty to cover any decrease from 2017 hotel gross operating profit for up to three years, subject to certain conditions. In addition, Ashford Prime is also acquiring a 22-acre plot of vacant land for $9.7 million for residential development adjacent to the golf course.
“The acquisition of the Ritz-Carlton Sarasota is an opportunity for us to acquire a luxury resort property with a premier location in the upscale and growing Sarasota market,” says Richard J. Stockton, Ashford Prime’s president and CEO. “This property fits perfectly with our strategy of owning luxury hotels and resorts and further diversifies our portfolio while also increasing the overall RevPAR of our portfolio, which is already the highest among our hotel REIT peers.”
Located on Sarasota Bay in downtown Sarasota, Ritz-Carlton Sarasota is in one of country’s fastest growing markets. Sarasota, located approximately 60 miles south of Tampa, is a popular and growing upscale, year-round destination on the west coast of Florida. Beyond the hotel experience, guests have easy access to the Sarasota area’s many amenities and activities, including dining and shops, art galleries, beaches, museums, boating, fishing, and golfing.
The Ritz-Carlton Sarasota was built in 2001 and has 266 rooms, including 31 suites. The resort also offers an array of amenities, including a 26,000 sq. ft. Beach Club with 410 feet of beachfront, a private Tom Fazio-designed Golf Club, a 15,000 sq. ft. Ritz-Carlton Spa Club, eight food and beverage outlets, including the Jack Dusty waterfront restaurant, 29,000 sq. ft. of flexible indoor meeting space, two outdoor pools, a 24-hour fitness club, lighted tennis courts, and the Ritz Kids Club. This property received over $21 million in capital improvements during the past few years. Post-closing, the property will continue to be managed by Ritz-Carlton.
In addition, the Ritz-Carlton Sarasota has been the recipient of numerous awards, including the AAA Five Diamond Lodging Award.