Soho House Receives Buyout Offer
What started out as a promising rebound day fizzled by the close with the DJIA up 15, Nasdaq down 20, the S&P 500 down 5 points and the 10-year treasury yield up .08 to 4.57%. Lodging stocks were mixed. SHCO traded up to a new high, up 47% but even that was a fizzle from the opening burst on the proposed takeover. SVC traded down to a new low and AHT fell -7% on the day.
The biggest news of the day was that Soho House & Co received an offer from a third-party consortium to acquire the company at $9 per share, 83% higher than yesterday's closing price. Executive Chairman Ron Burkle and his Yucaipa Companies and its affiliates will have to roll over their equity interests in the company as part of the transaction but Burkle said he and Yucaipa support the transaction. SHCO will have an independent Special Committee of the Board evaluate the offer. Ironically, they announced it the same day they reported mixed earnings. While that did not get any attention, SHCO saw revenue rise 13.6% in 3Q24 year over year, and Adjusted EBITDA was up $13.2 million to $48.3 million. As for why the stock declined all day from its strong pre-market and opening and was trading more than 20% below the supposed take-over price, clearly, there is uncertainty. Perhaps it is the lack of disclosure of who is in the third-party consortium, the fact this company turned down a supposed offer previously, or that the earnings kind of lacked certainty, particularly regarding 4Q24. Whatever it is, investors clearly do not see this as anywhere near a sure thing.
JMP Securities cut its price target on Hilton Grand Vacations to $50 from $55. They maintained their Market Outperform rating.
Apple Hospitality continues to have a healthy dividend yield close to 6.5%. They announced a special cash distribution of $0.05 per share in addition to their regular monthly cash dividend of $0.08 per common share, which will take them $1.01 per share in dividends for the year.
Hotel Equities said they had a transformative year fueled by Partnerships, Industry Recognition, and Commitment to Exceed Expectations. This year, HE collaborated with Procure Impact & AHLA joining forces with 22 fellow hospitality leaders in a collective pledge to dedicate over 100,000 hours of work to support overlooked and underserved populations. Through its partnership with Trust Hospitality, HE tapped into new opportunities across CALA, leveraging Trust's local expertise to elevate hospitality standards in the region. This partnership brought forth the opportunity for HE to be selected to manage the Hampton by Hilton in St. Thomas, U.S. Virgin Islands. HE closes the year on a high note with its entry into the outdoor hospitality sector after being chosen to manage Postcard Cabins a newly acquired brand under Marriott International. In total for the year, HE signed 66 new deals of which 49 are open and operating assets. Hotels across the HE portfolio exceeded expectations for engaging and recruiting loyalty program sign-ups, setting new benchmarks in 2024. In terms of key performance indicators, HE grew its overall Market Share every month in 2024, contributing to an impressive increase in its RevPAR Index for the 32nd consecutive month. Demonstrating further financial rigor, HE achieved a forecast accuracy of 0.7% YTD with a long-term accuracy of 1.1%. As Hotel Equities prepares for 2025, it remains focused on strategic growth, creating exceptional guest experiences, and ongoing investments in talent.
The Gupta Group, in partnership with The Remington Group and the Rudolph Bratty family, and Marriott Hotels announced the opening of Kingston Marriott in Kingston, Ontario. The 172-room property boasts over 10,000 square feet of meeting and event space, a restaurant, and the M Club.
The Westin Sacramento Riverfront Hotel & Spa announced its new name and unveiled its multimillion-dollar renovation. The hotel has transformed all of its 101 guestrooms and suites, its lobby and check-in area and features a restaurant, Spa La Le, a heated outdoor pool and whirlpool, a fitness center and expansive meetings and events spaces. The property will also debut a newly constructed private marina in early spring 2025. The Westin Sacramento Riverfront Hotel & Spa is owned by Monarch Alternative Capital and operated by HHM Hotels.
Hilton New York Times Square announced the completion of a $20 million public space renovation, unveiling an entirely transformed ground-floor lobby, a 15th-floor Sky Lobby, and three brand-new food and beverage concepts. The 44-story hotel has 478 guestrooms.
Whitestone Companies announced the acquisition of the Homewood Suites by Hilton Minneapolis-Mall of America, marking Whitestone's first investment in Minnesota. The 144-room extended-stay hotel will undergo a comprehensive renovation. Planned upgrades include modernized guest suites, refreshed public spaces, and enhancements to amenities such as the indoor pool, fitness center, activity area, and outdoor grilling stations. Whitestone Companies has selected Regal Hospitality to manage the property's daily operations.
Hilton announced the signing of an agreement with Parks Hospitality Holdings for a Conrad Hotels & Resorts hotel in Los Cabos. Expected to open in 2027, Conrad Los Cabos will feature 175 accommodations, including 111 guestrooms, 21 suites, and 43 Conrad Residences; a spa with 10 treatment rooms and a fitness center; a bridal suite with a full-service salon; numerous resort-style pools, outdoor decks, a lawn for social gatherings; Teen and Kids Clubs; five dining venues; boutique shops and over 500 square feet of meeting space.
Caption by Hyatt Downtown Nashville - The Gulch is now open in the Gulch neighborhood of downtown Nashville, Tennessee. Developed through a partnership between HRI Hospitality and C. B. Ragland Company, the hotel features 210 rooms, 2,200 square feet of indoor and outdoor meeting space, a fitness center, common spaces for working, and an all-day coffee and cocktail lounge. The hotel will be managed by HRI Lodging, LLC.
Hyatt Regency Washington on Capitol Hill announced its upcoming extensive renovation project, which will commence and conclude in 2025. The project will be completed in 2026 and will prepare the hotel to celebrate its 50th anniversary in 2026. It will encompass a complete redesign of all guestrooms, a modernization of the hotel's conference facilities, and a reconfiguration of the lobby and dining establishments.
Lark Hotels announced the formation of a joint venture with Life House. This joint venture will operate under Lake Hospitality LLC, doing business as Lark, encompassing all Lark Hotels and Life House-branded hotels, 33 restaurants and bars, and the groups' combined portfolio of nearly 100 independent properties throughout the continental U.S., Hawaii and Mexico. Combining their assets and expertise to form Lark Hospitality, Rob Blood (Founder, Lark Hotels), Peter Twachtman (CEO, Lark Hotels), and Marc Ghobriel (CEO, Life House) join forces with Blood as Chairman, Twachtman as CEO, and Ghobriel leading the Life House transition team.
Sonesta International Hotels Corporation announced the opening of Sonesta ES Suites Goodyear, a 78-room extended-stay hotel in Goodyear, Arizona.
IHG Hotels & Resorts reopened a new-build Staybridge Suites hotel in Port Arthur, Texas. The 91-room Staybridge Suites Port Arthur-Mall Area operates under the ownership of Port Arthur Hospitality LLC.
An investment vehicle managed and led by Lifestyle Hospitality Capital Group, and backed by funds advised by Elliott Investment Management, has bought The Gates Hotel South Beach for a reported $53 million. The 235-room hotel will undergo a transformative renovation, following which it will be rebranded as The Dean Hotel - Miami Beach. The hotel will be operated under the Dean brand, part of the Dean Group.
Waterton announced the acquisition of Poco Diablo Resort, a 137-key hotel in Sedona, Arizona. The property will be repositioned and re-branded as Outbound Sedona. The property will be the fifth hotel under Waterton's Outbound Hotelsbrand. Outbound Sedona will be operated by CoralTree Hospitality. Waterton will build on the renovation that was initiated by the previous owners which included a re-imagining of the lobby and onsite restaurant. The resort also offers 8,500 square feet of indoor/outdoor event space. The firm will embark on a full-scale remodel of the guestrooms and common areas. The expansive courtyard will also be reprogrammed by adding a new swim experience, including a heated pool and hot tub, mini-waterfall features, and zero-gravity lounging options. The current spa space will be expanded to include new treatment rooms, and the existing hotel pool, adjacent to the spa, will be refreshed.
Kissimmee Place Development Group, Inc. is proposing to build two hotels totaling 422 rooms on 8.5 vacant acres at Kissimmee Gateway Airport in Kissimmee, Florida, and 1.43 acres near the Toho Square Garage in downtown Kissimmee. The Kissimmee Gateway Airport project would be for a 122-room Hyatt Studios hotel will 3,000 square feet of conference space, according to hotelprojectleads. The Toho Square project would include a 300-room Hyatt Kissimmee Place hotel with a 30,000-square-foot conference center. Construction would begin on the airport hotel in January 2025 and the downtown hotel and conference center in April 2025. The total project cost is estimated at $115 million.
The Hillsdale City Council has approved CL Real Estate Development's request to amend the anticipated reconstruction completion date of the historic Keefer House Hotel in Hillsdale, Michigan, from December 31 to September 30, 2025. Once open, the Hotel will include a restaurant, 34 guest rooms, and two new retail spaces.
Sans Souci Properties, The Thrash Group, and Tandem Hospitality Groupannounced plans for a boutique hotel in downtown Lafayette, Louisiana. The hotel will feature 83 rooms, including 2 premier suites, a restaurant, an outdoor pool and creative pool bar concept, and 2,500 square feet of event spaces. Tandem Hospitality Group will manage the hotel's day-to-day operations. With construction scheduled to begin in Q1 2025, the property aims to be completed by Summer 2026.
The still-open 149-room Ramada by Wyndham Plymouth Hotel & Conference Center is for sale, according to a LoopNet listing. Potential redevelopment of the Plymouth, Minnesota property uses for the site include multifamily housing, health care, retail and more, the listing shows. Plymouth Hospitality purchased the Ramada site in 2018.
Ashford Hospitality Trust, Inc., has extended its mortgage loan secured by the Le Pavillon Hotel in New Orleans, Louisiana. The loan, which had an initial maturity date of December 2024, has two additional one-year extension options and a final maturity date of December 2027. It has been extended without a paydown and continues to have an outstanding balance of $37 million.