Host Hotels & Resorts Snap Up Baker’s Cay Resort Key Largo for $200M; Shares Fall 3%


Host Hotels & Resorts, Inc. (HST), a real estate investment trust that invests in hotels, has announced the acquisition of Baker’s Cay Resort Key Largo, Curio Collection for about $200 million.

Following the news release, shares of the company dipped 3% in Tuesday’s trading session. However, it recovered some of the losses marginally to close at $16.85 in the extended trading session.

The purchase price of the property, which comprises a 26,000 square foot of meeting space, including a 6,900 square foot event lawn and four food and beverage outlets, denotes a 6.2% capitalization rate and a 14.5x EBITDA multiple based on 2021 property forecasts.

The CEO of Host Hotels & Resorts, James F. Risoleo, said, “We are pleased to announce the off-market acquisition of our first hotel in the Florida Keys, which we believe will improve the EBITDA growth profile of our portfolio. After a complete $63 million renovation and repositioning in 2019, Baker’s Cay shows like a new resort. Additionally, the Florida Keys market benefits from excellent supply-demand dynamics owing in part to strict development ordinances, which have led to the highest 2019 upper-upscale RevPAR of any market in the US. We expect this resort to deliver over $300 of RevPAR and $69,000 of EBITDA per key in 2021, ranking eighth on both metrics in Host’s 2019 pro forma portfolio.” (See Host Hotels & Resorts stock chart on TipRanks)

Recently, BTIG analyst James W Sullivan reiterated a Buy rating on the stock with a price target of $19. The analyst’s price target implies upside potential of 13.6% from current levels.

The stock has a Moderate Buy consensus rating based on 6 Buys, 3 Holds and 1 Sell. The average Host Hotels & Resorts price target of $19.06 implies 13.9% upside potential from current levels.

Host Hotels & Resorts scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock is likely to outperform the market averages. Shares have gained 54.3% over the past year.

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