Braemar Hotels & Resorts is offloading its oceanfront resort in Key West for $190 million.
The sale of Pier House Resort & Spa is part of the REIT’s broader hotel asset selloff intended to fund a $480 million payout linked to a split with its manager, Bisnow reported.
Through affiliates Ashford Pier House LP and Ashford TRS Pier House LLC, Braemar entered an agreement to sell the 142-key hotel to a buyer hidden behind the business entity Last Mango Owner LLC.
The sale price pencils out to $1.3 million per key.
Pier House was built in 1967 as a 50-room motel. Braemar acquired it for $93 million in 2014 after the hotel underwent a $12 million renovation. That deal broke down to about $653,000 per key.
Braemar has also agreed to sell the Park Hyatt Beaver Creek Resort & Spa in Colorado to an unidentified buyer for $176 million and three other luxury properties for a combined $437.5 million. Those properties include the Ritz-Carlton, Sarasota in Florida and Hotel Yountville and the Bardessano Hotel & Spa in California, according to TradingView.
Braemar’s liquidation effort will help fund the separation from its longtime manager, Ashford Incorporated, led by Monty Bennett. Bennett was previously Braemar’s CEO and currently serves as chairman of its board of directors. The Dallas-based company announced last month it would walk away from Bennett, becoming a self-managed REIT with plans to simplify its corporate structure, recruit new board members and retain most of its hotel portfolio across the U.S. and Caribbean.
Braemar said it would also cancel its contracts with two Ashford subsidiaries.
But it is paying a $480 million termination fee to Bennett’s Ashford Hospitality.
Braemar’s largest shareholder, Saudi-Canadian businessman Wafic Rida Said’s Al Shams Investments Ltd., has voiced outrage over the termination fee, calling it “theft dressed in a suit.”
In a scathing letter sent last month, Al Shams accused Bennett of betrayal and “brazen self-dealing,” saying it would “pursue every available legal remedy against [board members] personally, against Mr. Bennett, and against all parties complicit in these transactions.”
Bennett and four other Braemar board members are set to resign as part of the deal. CEO Richard Stockton will remain.
The Pier House transaction comes just one month after the sale of the Cheeca Lodge & Spa in Islamorada to Bass Pro Shops, reflecting demand for ultra-luxury hospitality real estate in the region.
—Grace McClung
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