Host Hotels Acquires 1 Hotel Central Park Hotel for $265M

Host Hotels & Resorts Inc. has purchased the fee-simple interest in 1 Hotel Central Park, a 234-room luxury property, for around $265 million in cash. This acquisition price reflects an 11.1x EBITDA multiple and a cap rate of approximately 8.1% based on the property's projected 2024 performance.

Expected Performance and Strategic Importance

The property is poised to be among Host’s top-10 assets for 2024, with anticipated revenue per available room (RevPAR) of $545, total RevPAR of $735, and EBITDA per key exceeding $100,000. This acquisition strengthens Host's portfolio in New York City, a leading market for revenue per available room.

Leadership's Perspective

James F. Risoleo, President and CEO of Host Hotels & Resorts, expressed enthusiasm for adding 1 Hotel Central Park to their portfolio. He highlighted the property's appeal to luxury guests in Upper Manhattan, a top-performing submarket. This acquisition is Host's third involving the 1 Hotel brand, following previous purchases in Nashville and South Beach. Risoleo emphasized the property's strong cash flow, minimal near-term capital expenditure needs, and prime location near Central Park and Fifth Avenue.

Property Features and Amenities

Opened in 2015, the LEED Certified 1 Hotel Central Park includes 234 rooms, 25 suites, and a recently added five-key penthouse with large terraces and a presidential suite. The hotel features Jams, a restaurant and bar on the lobby level run by James Beard Award-winner Jonathan Waxman, along with 2,000 square feet of flexible meeting space, a fitness center, and a business center on the second floor.

Future Acquisitions and Broader Strategy

Host Hotels & Resorts is also set to close on the acquisition of the fee-simple interest in the 450-room Ritz-Carlton O’ahu, Turtle Bay. This property, located on Oahu's north shore, includes a 49-acre land parcel ready for development and was purchased for approximately $680 million, net of key money. The acquisition represents a 16.3x EBITDA multiple or a cap rate of about 5.3% based on the resort’s 2024 estimated results.

CEO's Vision for Growth

Risoleo noted that Host Hotels & Resorts has acquired $1.5 billion worth of iconic hotels in 2024 at a blended 13.6x EBITDA multiple, contributing over $100 million in estimated full-year EBITDA. He emphasized the company’s progress towards its goal of $3 billion in acquisitions at a lower blended EBITDA multiple and their ongoing focus on strategic growth opportunities.