CHICAGO - Hyatt Hotels Corporation (NYSE:H) announced today the sale of the Hyatt Regency Orlando and an adjacent land parcel for approximately $1.07 billion to RIDA Development Corporation and an Ares Management (NYSE:ARES) Real Estate fund. The deal also includes a long-term management agreement to keep the property under the Hyatt Regency brand.
The transaction is part of Hyatt's strategy to divest owned properties, exceeding its $2 billion asset-disposition target set in 2021. Over three years, Hyatt has generated $2.6 billion in gross proceeds, net of acquisitions, at a multiple of 13.3x.
Hyatt Regency Orlando, one of the largest Hyatt hotels globally, offers 1,641 rooms and 315,000 square feet of event space. It attracts over one million guests annually and is located near Orlando's popular attractions and the Orange County Convention Center.
RIDA and Ares have committed to investing in significant renovations of the hotel and have also entered into a development agreement with Hyatt for a new Grand Hyatt hotel on the adjacent 45 acres. The planned Grand Hyatt Orlando aims to offer approximately 2,500 rooms and will be developed in phases.
Mark S. Hoplamazian, Hyatt's CEO, expressed enthusiasm about the sale and the partnership with RIDA and Ares, noting the strategic importance of the Orlando market. The new Grand Hyatt Orlando is expected to complement the Hyatt Regency Orlando, creating a combined guestroom offering of over 4,000 rooms in the area.
Ira Mitzner, President & CEO of RIDA, and Andrew Holm, Ares' Co-Head of U.S. Real Estate Investments, both highlighted the importance of the location and their plans to enhance the guest experience and create long-term value.
This news is based on a press release statement from Hyatt Hotels Corporation.
In other recent news, Ares Management Corporation reported strong second-quarter performance, marked by significant growth in assets under management and robust fundraising results. The company declared a third-quarter common dividend of $0.93 per share, a 21% increase from the previous year, and invested $26 billion in Q2, marking its second-highest quarter on record. The firm's total assets under management have surged to a record $447 billion, an 18% increase year-over-year.
TD Cowen demonstrated confidence in Ares Management by increasing its price target from $158.00 to $162.00, while reiterating a Buy rating on the stock. The firm's analysis suggests that Ares Management is on a promising trajectory, with strong inflows and a favorable credit landscape supporting its growth. The company's growth trajectory aligns well with the key performance indicators set forth during its May Investor Day, suggesting a robust path toward its 2028 targets.
Ares Management plans to launch new products in the private wealth channel, particularly in infrastructure, and is open to exploring merger and acquisition opportunities to scale up in large addressable markets. The firm anticipates solid economic growth and improvements in transaction volume, but also expects a slight increase in default rates and some structural deterioration in the upper middle market credit sector. Despite these challenges, Ares Management's leadership is confident in the resilience and performance of their investment strategies.
InvestingPro Insights
As Ares Management Real Estate fund takes a significant step in the hospitality sector with the acquisition of the Hyatt Regency Orlando, it's pertinent to observe the financial health and market position of Ares Management Corporation (NYSE:ARES). Here are some insights based on the latest data from InvestingPro:
InvestingPro Data indicates that Ares Management Corporation boasts a substantial market capitalization of $45.36 billion. Despite a challenging economic environment, the company's commitment to shareholder returns is evident with a dividend yield of 2.55% and a history of raising its dividend for 4 consecutive years. This aligns with the InvestingPro Tip highlighting that Ares has maintained dividend payments for 11 consecutive years, demonstrating a consistent approach to rewarding its investors.
While Ares trades at a high Price / Book multiple of 22.67, it's also notable that the company has achieved a high return over the last year, with a 1 Year Price Total Return of 53.61%. This suggests a strong market confidence in Ares, which could be attributed to its diversified investments and strategic management decisions, such as the recent purchase of the Hyatt Regency Orlando.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available for Ares Management Corporation. These include insights on earnings revisions, earnings multiples, and liquidity positions, which can be found at: https://www.investing.com/pro/ARES. Currently, there are 10 additional InvestingPro Tips listed, providing a comprehensive view of the company's financial outlook and investment potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.