BETHESDA, Md., June 25, 2012 /PRNewswire/ -- Host Hotels & Resorts, Inc. (NYSE: HST) today announced that the Company 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.
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. Barra is one of the fastest growing sub-markets in Rio de Janeiro with over 3.2 million square feet of office and retail space currently under construction. The majority of this development, as well as the Olympic-related infrastructure for the 2016 games, are located within a five minute drive from the hotels. Barra is the headquarters location of many, major Brazilian and global companies from several different industries such as oil and gas, technology and pharmaceutical. Rio de Janeiro is one of Brazil's most important economic, scientific, cultural and financial centers and is a world-renowned international leisure and meetings destination. Moderate expected supply growth, combined with strong expected demand and average rate growth, provide exceptional upside potential for these two hotels. In addition to the Olympic Games, the city will also host the 2014 World Cup finals.
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 located a block from the new Music City Center, Nashville's new 1.2 million square feet convention center scheduled to open in 2013 and will be the first Hyatt in downtown Nashville. As the capital of Tennessee, Nashville is a center for music, healthcare, publishing, banking and transportation industries, and also home to a number of colleges and universities. Nashville's new Music City Center, with over 400,000 room nights already on the books, is expected to increase the city's capacity for larger conventions and events. WLS is a recognized leading developer, owner and manager of mid- to large-scale premium-branded hotels across the country. 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 W. Edward Walter, president and chief executive officer.
ABOUT HOST HOTELS & RESORTS
Host Hotels & Resorts, Inc. is an S&P 500 and Fortune 500 company and is the largest lodging real estate investment trust and one of the largest owners of luxury and upper-upscale hotels. The Company currently owns 104 properties in the United States and 16 properties internationally totaling over 64,000 rooms. The Company also holds non-controlling interests in a joint venture in Europe that owns 13 hotels with approximately 4,200 rooms, a joint venture in Asia that owns one hotel with approximately 300 rooms in Australia and is investing in seven hotels in India with approximately 1,750 rooms that are in various stages of development in three cities. Guided by a disciplined approach to capital allocation and aggressive asset management, the Company partners with premium brands such as Marriott®, Ritz-Carlton®, Westin®, Sheraton®, W®, St. Regis®, Le Meridien®, The Luxury Collection®, Hyatt®, Fairmont®, Four Seasons®, Hilton®, Swissotel®, ibis®, Pullman®, and Novotel®* in the operation of properties in over 50 major markets worldwide. For additional information, please visit the Company's website at www.hosthotels.com.
Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "plan," "predict," "project," "will," "continue" and other similar terms and phrases, including references to assumption and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the potential for terrorist attacks, that will affect occupancy rates at our hotels and the demand for hotel products and services; risks associated with hotel development, including that projects will not be completed on schedule or within budget and may not perform in accordance with our expectations; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements; relationships with property managers; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; our ability to complete acquisitions and dispositions; and our ability to continue to satisfy complex rules in order for us to remain a REIT for federal income tax purposes and other risks and uncertainties associated with our business described in the Company's filings with the SEC. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of the date of this release, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
* This press release contains registered trademarks that are the exclusive property of their respective owners. None of the owners of these trademarks has any responsibility or liability for any information contained in this press release.
SOURCE Host Hotels & Resorts, Inc.