Host Hotels & Resorts Announces Two Transactions
BETHESDA, Md.—Host Hotels & Resorts, Inc. announced that it has entered into an agreement to develop two hotels in Rio de Janeiro, Brazil and, through a joint venture agreement, will develop one hotel in Nashville, Tennessee. READER COMMENTS
The Company has acquired land and entered into a construction agreement with Galwan Engineering and Performance Realty to develop a 150-room Novotel hotel and a 255-room ibis hotel in Rio de Janeiro, Brazil for approximately $72 million. As part of this transaction, the Company signed an agreement with Accor to manage the hotels. Construction is scheduled to begin in July 2012 and the hotels are projected to open mid-year 2014.
The two hotels will be located in Barra da Tijuca ("Barra"), less than one mile from the future Olympic Park, which will house the majority of all activities for the summer Olympic Games in 2016.
In an announcement, W. Edward Walter, president and chief executive officer said, "We are excited about adding two more hotels in Brazil, a market that has a strong economy, tremendous growth potential and a limited number of existing hotel rooms. Our first investment in Brazil, the JW Marriott in Rio, has significantly exceeded our projections and has been a great investment for the company and we are pleased to build upon this success."
On the domestic front, the Company announced it has entered into a 50/50 joint venture agreement with White Lodging Services ("WLS") to develop the 255-room Hyatt Place in downtown Nashville, Tennessee for a total price of approximately $46 million, including the purchase of the land. The joint venture intends to finance a significant portion of the project.
Hyatt Place Nashville/Downtown will be the first Hyatt in downtown Nashville. WLS will act as the hotel operator under a franchise agreement with Hyatt for the Hyatt Place brand. Construction of the hotel has commenced, and the hotel is expected to open in December 2013, joining more than 165 other Hyatt Place hotels in North America.
"This joint venture is an effective use of our capital to expand and diversify our investments to include the development of upscale properties in urban locations while minimizing our risk and achieving attractive yields. We view this transaction as a unique opportunity to build a relationship with an outstanding, independent hotel operator and developer," said Walter.
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