Ashford Hospitality Prime on Tuesday announced it has entered into a definitive agreement to acquire the 180-room Ritz-Carlton St. Thomas for US$64 million ($355,000 per key) from Marriott International. The acquisition is expected to close in approximately 30 days.
The hotel REIT intends to finance the property, which will continue to operate under the Ritz-Carlton brand, with approximately US$40 million of non-recourse mortgage debt.
The purchase price represents a trailing 12-month cap rate of 10% on net operating income and a trailing 7.2x EBITDA multiple, according to the company’s preliminary estimates. On a trailing 12-month basis as of October 2015, Ashford estimates the hotel achieved RevPAR of US$433, with an ADR of US$555 and 78% occupancy.
Opened as The Ritz-Carlton St. Thomas in 1996, the resort recently completed a comprehensive $22 million renovation of guest rooms and public space. Ashford Prime Chairman and CEO Monty J. Bennett said the company has the ability to expand the resort further through the addition of keys and villas, and he reports group revenue booking pace for 2016 is up 8.6% over 2015.