Ryman Hospitality (RHP) Boosts Texas Portfolio With Buyout
Scaling up its overall portfolio quality, Ryman Hospitality Properties, Inc. RHP recently concluded the buyout of JW Marriott San Antonio Hill Country Resort & Spa in San Antonio, TX, from Blackstone Real Estate Income Trust, Inc. for approximately $800 million.
Reflecting positive sentiments, shares of RHP gained 2.04% on Jul 3 normal trading session at the NYSE.
The purchase price represented an adjusted EBITDAre multiple of around 12.6X for the trailing 12 months ended Mar 31, 2023. Moreover, management expects the acquisition to be accretive to adjusted funds from operations (FFO) per share in the first full year of ownership. Hence, RHP’s recent move seems prudent.
JW Marriott Hill Country resides amid nearly 640 acres in the Texas Hill Country, an attractive and growing market with no emerging competitive supply. Additionally, the premier group-oriented resort, which opened in 2010, comprises 1,002 rooms and the total indoor and outdoor meeting and event space sprawls over 268,000 square feet.
Its amenities include a 26,000 square-foot Lantana Spa, eight food and beverage outlets, and a nine-acre River Bluff water experience. The property also offers TPC San Antonio featuring two 18-hole golf courses — the Greg Norman-designed Oaks Course and the Pete Dye-designed Canyons course.
Given the resort’s advantageous location and high-quality amenities, it is likely to attract group and leisure demand, boding well for Ryman Hospitality’s business. Also, the resort is expected to continue operating under the JW Marriot banner.
The continued momentum in leisure travel demand and rebound in business transient and group demand have driven the recovery in the lodging industry in the wake of the pandemic. Given this backdrop, RHP’s well-located geographically diverse properties are likely to benefit.
Also, this hospitality real estate investment trust (REIT) focuses on acquiring and/or developing upper-upscale or luxury assets, particularly group-oriented meeting hotels in urban and resort markets. The buyout of JW Marriott Hill Country complements its Gaylord Hotels portfolio and brings about geographic and brand diversity to the company’s existing portfolio.
Further, its healthy balance sheet position enables it to capitalize on long-term growth opportunities.
Nonetheless, persistent macroeconomic uncertainty and a high interest rate environment pose concerns for the company.
Shares of this Zacks Rank #3 (Hold) company have gained 15.9% in the year-to-date period compared with the industry’s growth of 0.2%.
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Stocks to Consider
Some better-ranked stocks from the REIT sector are Ventas VTR, W.P. Carey WPC and Innovative Industrial Properties IIPR. Each company presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Ventas’ ongoing year’s FFO per share has been raised marginally over the past two months to $2.98.
The Zacks Consensus Estimate for W.P. Carey’s current-year FFO per share has moved marginally northward over the past week to $5.36.
The Zacks Consensus Estimate for Innovative Industrial Properties’ 2023 FFO per share has moved 3.6% upward in the past two months to $8.66.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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