The board of directors of real estate investment trust Braemar Hotels & Resorts is initiating a process for the immediate sale of the company, including nine resorts and five urban properties, citing inability to "flourish in today's market environment."
The board of directors formed a special committee comprised solely of independent and disinterested directors to explore a range of strategic alternatives, aimed at maximizing both near- and long-term shareholder value. After reviewing various strategic options to maximize value for shareholders, the board has determined that it is in the best interests of the company and its shareholders to pursue a sale of the company. Accordingly, the company, together with its financial advisor, Robert W. Baird & Co., is initiating the sale process immediately, including soliciting interest from potential buyers and coordinating customary information sharing.
Luxury Portfolio
Braemar's predominantly luxury hotel portfolio has consistently achieved the highest revenue per available room among publicly traded lodging REITs, the company claimed in a statement. Further, it argued that luxury properties have historically led RevPAR growth due to their prime locations and limited competitive supply.
The portfolio includes nine resort and five urban properties, operated under flags like Ritz-Carlton Reserve, Four Seasons, Ritz Carlton, Park Hyatt, Autograph Collection by Marriott, Hilton and Sofitel. In its statement, the company claimed its portfolio has been performing "extremely well" with year-to-date RevPAR growth of 2.9 percent through June 30.
The company claimed that the "high-quality nature" of its portfolio has attracted "multiple activist investors" over the years. "It is not believed that a luxury RevPAR lodging REIT like Braemar can flourish in today's market environment due to the historically low EBITDA multiple lodging REITs are achieving as well as the ongoing activism the company has received," the statement continued. "This same dynamic occurred with Strategic Hotel & Resorts, another luxury lodging REIT that after several years of undervaluation and activism, explored strategic alternatives and ultimately was sold in an all-cash transaction."
"We've built a high-quality portfolio that is well-positioned to attract significant interest from private market buyers," Braemar CEO Richard Stockton said in the statement. "With improving economic conditions, continued strength in industry performance, limited new room supply, and healthy consumer spending, I believe we are entering a favorable environment for a potential sale."
Transaction Terms
In conjunction with the sale, Braemar and its advisor, Dallas-based Ashford, agreed that “while a fair and reasonable calculation of all amounts due to Ashford would be significantly higher,” Ashford will accept a $480 million termination fee for its advisory agreement. Ashford already received $17 million of the company sale fee upon the execution of the letter agreement, which will be credited against the company sale fee in the event Braemar is sold prior to July 1, 2028.
Braemar’s buyer also will be required to assume agreements with two Dallas-based Ashford subsidiaries, project manager Premier Project Management and management firm Remington Lodging & Hospitality. There is a $25 million cancellation fee for agreements with those companies as well.
Real Estate and Assets
Beyond the value of its hotels, Braemar also owns excess land at its Ritz-Carlton Sarasota, Four Seasons Resort Scottsdale and Ritz-Carlton Lake Tahoe properties. At the time of acquisition, this excess land was attributed a value of $9.7 million at The Ritz-Carlton Sarasota, which was acquired in 2018, $8.4 million at The Ritz-Carlton Lake Tahoe, which was acquired in 2019, and $17.8 million at the Four Seasons Resort Scottsdale, which was acquired in 2022. The company also had $68 million of positive net working capital as of June 30.
In early August, the company announced the closing of the sale of the Marriott Seattle Waterfront resulting in $50.8 million of net proceeds. The total indebtedness of the company is currently approximately $1.172 billion, and the current liquidation value of its outstanding preferred stock is approximately $473 million. The company's share count currently stands at 73.6 million fully diluted shares outstanding, which is comprised of 68.2 million shares of common stock and 5.4 million OP units.
The Braemar portfolio currently consists of the following hotels:
| Braemar Hotels & Resorts Portfolio: | |||
| Hotel | Location | # of Rooms | TTM NOI** |
| Capital Hilton* | Washington, D.C. | 559 | 15.0 |
| The Ritz-Carlton Lake Tahoe | Truckee, CA | 170 | 5.1 |
| The Ritz-Carlton St. Thomas | St. Thomas, USVI | 180 | 14.5 |
| The Ritz-Carlton Sarasota | Sarasota, FL | 276 | 18.4 |
| The Ritz-Carlton Reserve Dorado Beach | Dorado, PR | 96 | 17.2 |
| Four Seasons Resort Scottsdale at Troon North | Scottsdale, AZ | 210 | 21.3 |
| The Notary Hotel | Philadelphia, PA | 499 | 11.2 |
| Pier House Resort & Spa | Key West, FL | 142 | 12.6 |
| Park Hyatt Beaver Creek Resort & Spa | Beaver Creek, CO | 193 | 9.4 |
| Bardessono Hotel & Spa | Yountville, CA | 65 | 3.8 |
| Hotel Yountville | Yountville, CA | 80 | 2.9 |
| Sofitel Chicago Magnificent Mile | Chicago, IL | 415 | 4.6 |
| TOTAL | 2,885 | 135.8 | |
| The Clancy | San Francisco, CA | 410 | 5.2 |
| Cameo Beverly Hills (1) | Beverly Hills, CA | 143 | (2.2) |
| * Braemar has 75% ownership in this hotel. | |||
| ** As of June 30, 2025; $ in millions | |||
| (1) The Gross Asset Value of the Cameo Beverly Hills is currently $86.2 million. | |||
The company recently entered into a non-binding letter of intent with a potential buyer for the sale of the 410-room Clancy hotel in San Francisco for a purchase price of $115 million. The sale price represents a 4.5 percent capitalization rate on net operating income for the trailing 12 months ended June 3. The transaction is expected to close in the fourth quarter, subject to customary conditions. The company provides no assurances that the sale will be completed on these terms or at all.
"We explored multiple alternatives for Braemar including a potential internalization of management," said Rebeca Odino-Johnson, chairperson of the special committee. "However, given the sustained disconnect between our share price and our iconic portfolio's intrinsic real estate value, the Board believes pursuing a sale process is the right step at this time. The Board also believes that this is the best opportunity for shareholders to realize a premium to the existing share price."
"The termination fee payable to Ashford upon a sale of the company has increased considerably over the last few years as a result of the growth of the portfolio and the additional services Ashford provides to the company and its hotels. As this process moves forward, we will remain focused on executing our business plan and generating optimal returns from our assets to deliver maximum value to shareholders in the context of the anticipated transaction."
"When we created Braemar back in 2013, our hope was that Braemar's high-quality portfolio and strong property performance would result in an attractive valuation giving the company an attractive cost of capital for growth," said Monty Bennett, chairman of the board. "While Braemar has traded at a similar multiple to its publicly-traded lodging REIT peers, the reality is that the public markets have not been friendly to lodging REITs, including Braemar. This fact, along with the constant shareholder activism that Braemar has experienced, has led us to conclude that a sale of the company is the best way to maximize value for shareholders. Hotel portfolios like the Braemar portfolio do not come to the market very often, and we believe the opportunity to acquire this iconic portfolio will attract significant buyer interest from around the world and result in an attractive valuation for shareholders."