DALLAS—Ashford Hospitality Trust has signed a definitive agreement to acquire the 168-room Lakeway Resort & Spa in Austin, Texas, for a total consideration of $33.5 million ($199,000 per key). The acquisition is expected to close within the next 30 days. Upon closing, the property will be managed by Remington Lodging.
The purchase price of $33.5 million represents a trailing 12-month cap rate of 7 percent on net operating income which equates to an 11.4x trailing 12-month EBITDA multiple. On a forward 12-month basis, the purchase price represents an estimated cap rate of 8.7 percent on net operating income, which equates to an estimated 9.5x forward EBITDA multiple. On a trailing 12-month basis, the hotel achieved RevPAR of $108.67, with occupancy of 62.5 percent and an average daily rate of $173.87.
“This acquisition represents an exceptional opportunity considering its significant upside potential. With its unique lakefront location in Austin’s northwest corridor and the recent capital investments at the property, the Lakeway Resort & Spa is well positioned within the marketplace to provide best-in-class product and services and capitalize on the tremendous growth that is occurring in Austin,” said Monty J. Bennett, Ashford Trust’s chairman and chief executive officer. “Additionally, with the ability to install our affiliated property manager, Remington Lodging, as the new property manager for the hotel, we expect to achieve continued growth in the hotel’s operating performance.”
Originally developed in 1966, the Lakeway Resort & Spa underwent major expansions in 2001 and 2007 that significantly increased the size of the property. The lakefront property features four separate buildings with 168 guestrooms and approximately 24,000 square feet of meeting space including four large flexible ballrooms. In addition to the guestrooms, the hotel controls eight luxury condominium units through a rental pool agreement. Amenities include a full-service spa, a 24-hour fitness center, three swimming pools, and a full-service restaurant overlooking Lake Travis, as well as proximate access to golf, tennis, and the Lakeway Marina.
The Lakeway Resort & Spa underwent capital improvements of approximately $6 million over the past 24 months, including a complete renovation of the guestrooms.