Hyatt Hotels Corp Sells Real Estate Portfolio for $2 Billion

By Greg Peters • Monday, June 30 15:34 • Permanent Link

Hyatt Hotels Corporation has announced the sale of its owned real estate portfolio to Tortuga Resorts for $2.0 billion. The real estate portfolio consists of 15 all-inclusive resort assets located across Mexico, the Dominican Republic, and Jamaica. As part of the transaction, Hyatt and Tortuga will enter into 50-year management agreements for 13 of the 15 properties, with terms consistent with Hyatt’s existing all-inclusive management fee structure. Hyatt will also retain $200 million of preferred equity in connection with the real estate transaction.

Following the sale of the real estate portfolio, Hyatt’s net purchase price for Playa’s asset-light management business is approximately $555 million, net of gross proceeds from asset sales. Hyatt expects to earn $60 to $65 million of stabilized adjusted EBITDA in 2027, inclusive of earnings from Unlimited Vacation Club and ALG Vacations, representing an implied multiple of 8.5x – 9.5x.

Upon completion of the real estate sale, Hyatt is required to use the proceeds to repay the delayed draw term loan used to fund a portion of the Playa acquisition and expects pro forma net leverage to be consistent with thresholds necessary to maintain its investment-grade credit profile.

In connection with the transaction, BDT & MSD Partners is acting as the lead financial advisor to Hyatt, with Berkadia serving as Hyatt’s real estate advisor. Latham & Watkins LLP is serving as Hyatt’s legal advisor. On the other hand, Goldman Sachs & Co. LLC is acting as the exclusive financial advisor to Tortuga, with Simpson Thacher & Bartlett LLP acting as Tortuga’s legal advisor.

The sale of the real estate portfolio to Tortuga is described as transforming the acquisition of Playa Hotels & Resorts into a fully asset-light transaction and increasing Hyatt’s fee-based earnings.

The press release did not provide specific metrics for the previous period to compare the changes in the various financial metrics. The market has reacted to these announcements by moving the company's shares -0.06% to a price of $139.29. If you want to know more, read the company's complete 8-K report here.

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