Hyatt Hotels Corporation announced that an affiliate of Hyatt has completed the sale of the 1,641-room Hyatt Regency Orlando and adjacent 45 acres of land to affiliates of RIDA Development Corporation and an Ares Management Real Estate Fund (“Ares”) for approximately $1.07 billion, while retaining a long-term management agreement under the Hyatt Regency brand.
In connection with the transaction, Hyatt retained $265 million in non-controlling preferred equity and provided an additional $50 million in seller financing for the adjacent 45-acre property.
The sale of Hyatt Regency Orlando is part of Hyatt’s capital allocation strategy to sell owned hotels and reinvest the proceeds in asset-light platforms that accelerate growth, and exceeds Hyatt’s expanded $2 billion asset divestiture commitment announced in 2021. Over a three-year period, Hyatt has now raised $2.6 billion in gross proceeds, net of acquisitions, representing a multiple of 13.3x.
Hyatt Regency Orlando, the fourth largest Hyatt hotel in the world by room count, features 1,641 rooms and 300,000 square feet of flexible meeting space. The hotel, which welcomes an average of more than one million guests and attendees annually, is strategically positioned due to its prime location near popular Orlando attractions and its direct connection to the Orange County Convention Center, the second largest convention facility in the United States. The city’s strong tourism industry makes Orlando an important market, and RIDA and Ares intend to invest additional capital in a major renovation plan that will focus on guest rooms and other amenities to further enhance the guest experience.
In addition, based on their extensive experience in developing large convention facilities, RIDA and Ares have entered into a development agreement with Hyatt for a new Grand Hyatt hotel on the 45-acre property adjacent to the Hyatt Regency Orlando. Upon the satisfaction of certain conditions, Hyatt and an affiliate of RIDA and Ares will enter into a long-term management agreement for the hotel.
Mark S. Hoplamazian, President and CEO of Hyatt, said, “The sale of Hyatt Regency Orlando is the largest single sale in Hyatt’s history. We are thrilled to partner with RIDA and Ares on this transaction. Working with these world-class developers, we will continue to advance the success of Hyatt Regency Orlando and expand our brand presence in the nation’s most visited destination with a new Grand Hyatt hotel.”
RIDA and Ares expect to obtain the necessary permits and other government support over the next few years for the proposed Grand Hyatt Orlando, which is expected to have more than 2,500 rooms and be developed in multiple phases. The Grand Hyatt Orlando development is expected to create a total of more than 4,000 guest rooms at the Hyatt Regency Orlando and the Grand Hyatt Orlando at the Orange County Convention Center, further strategically positioning Hyatt in this thriving, high-demand market.
Ira Mitzner, President and CEO of RIDA Development Corp., added, “We are thrilled to partner with Ares again on this historic transaction. We look forward to working with Hyatt to grow and enhance the Orange County Convention Center (OCCC) district and create an unparalleled guest experience for group and leisure customers. We look forward to working together on a visionary public-private partnership with the State of Florida, Orange County, the OCCC and all community stakeholders.”
Andrew Holm, Ares partner and co-head of U.S. real estate investments, added, “Hyatt has established Hyatt Regency Orlando as a landmark of its community’s vibrant business and leisure activities, and we look forward to working closely with the Hyatt team and advancing our partnership with RIDA to realize the potential of this important location. We look forward to leveraging our extensive investment experience in executing large, complex projects to create long-term value in this attractive market.”
For more information about Hyatt Regency Orlando, visit hyattregencyorlando.com.
The term “Hyatt” is used for convenience in this press release to refer to Hyatt Hotels Corporation and/or one or more of its subsidiaries.
