Blackstone Real Estate said it will be selling the Turtle Bay Resort in North Shore of Oahu for $725 million to Host Hotels & Resorts.
Host said it has entered into an agreement to acquire the fee simple interest in the 450-key resort, which includes a 49-acre oceanfront land parcel entitled for development for nearly $680 million, net of key money. In a statement, Host said the purchase price allocation is expected to be $630 million for the resort and $50 million for the land parcel.
The purchase price represents a 16.3x EBITDA multiple or a cap rate of approximately 5.3% on the resort’s 2024 estimated results. The transaction is expected to close late July 2024.
The new owners will transition management to Marriott International and flag it under the Ritz-Carlton brand. Host said Marriott provided key money and favorable modifications on multiple existing management agreements.
“This transaction is an excellent outcome for our investors and a testament to Blackstone’s ability, including through the pandemic, to transform iconic, luxury hospitality assets,” said Rob Harper, head of Blackstone Real Estate Asset Management Americas. “The team executed an ambitious business plan, investing significant capital to reposition the resort for long-term success while also adding high-quality jobs on the North Shore.”
Blackstone acquired the resort in 2018 for $332 million and has since invested “significant capital” to renovate it. The resort remained closed from March 2020 to June 2021 and recently underwent extensive renovations, which includes the rooms and bungalows, lobby, swimming pools, restaurants, retail, spa, meeting venues, a new club lounge, building systems and an enhanced exterior and arrival experience.
Host doesn’t plan on investing in further renovations in the near term, thanks to the recent transformation, said James F. Risoleo, president and CEO, Host Hotels & Resorts. “We look forward to working with employees and local partners to build upon the resort’s position on the North Shore of Oahu. With the planned Ritz-Carlton rebranding, we believe the resort will generate outsized growth as it stabilizes, further elevating the EBITDA growth profile of our portfolio.”
Besides the significant boost that the Ritz-Carlton branding will give to the property, the resort is expected to be one of Host’s top assets based on estimated full year 2024 results with an expected RevPAR of $570, total RevPAR of $980, and EBITDA per key of $86,0002. After ramping up from the recent renovation and the rebranding, Host said it expects Turtle Bay to stabilize between approximately 10-12x EBITDA3 between 2027 and 2029.
Sitting on 1,300 acres, with five miles of beach and coastline views, Turtle Bay features rooms with ocean views, as well as 42 bungalows with direct access to the beach, separate check-in and a private pool. The resort is home to 18,000 square feet of indoor meeting space, a club lounge, six dining options, seven retail spaces, a fitness center, spa, two golf courses, seven beaches, four resort pools, tennis and pickle ball courts, an equestrian center, a working farm and access to 12 miles of oceanfront trails.
Originally opened in 1971, Turtle Bay was earlier associated with brands such as Hyatt and Hilton, a report mentioned.