Hyatt Hotels Corporation will sell 38 select service hotels as franchises to a company organised by Lone Star Funds for about $590 million.
Hyatt Hotels Corporation will sell 38 select service hotels as franchises to a company organised by Lone Star Funds for about $590 million.The portfolio of 38 hotels consists of Hyatt Place and Hyatt House hotels totaling 4,950 rooms. As part of the sale, Hyatt will enter into franchise agreements with the purchaser- Lone Star Funds, with all hotels maintaining their existing Hyatt Place and Hyatt House branding.
The purchaser intends to spend approximately $50 million in additional capital expenditures across the Hyatt Portfolio over the next 24 months. Aimbridge Hospitality, LLC will manage the hotels for the purchaser. The transaction is expected to be completed in November 2014.
Commenting on the new development, Steve Haggerty, Global Head of capital strategy, franchising and select service for Hyatt, said “Hyatt utilised its strong balance sheet and industry expertise to launch the Hyatt Place and Hyatt House brands. We are now leveraging that brand equity to recycle capital while maintaining a long-term brand presence in multiple markets,”
“We believe the renovations planned for the portfolio will help maintain the brands’ reputation as the leading brands in their segments and we look forward to deepening our relationship with Lone Star and Aimbridge,” he added further.
It manages, franchises, owns and develops Hyatt branded hotels, resorts and residential and vacation ownership properties around the world. As of December 31, 2013, the company's worldwide portfolio consisted of 549 properties.