RIDA Development Corporation and Ares Management Real Estate Fund have teamed up to buy a major Florida property from Hyatt Hotels for roughly $1.07 billion.
Hyatt Regency Orlando consists of 1,641 rooms and 315,000 feet of square foot space. That marked the hospitality chain’s fourth-largest hotel operated worldwide by room count. On average annually, the property hosts over a million guests.
Part of the deal includes Hyatt retaining $265 million of non-controlling preferred equity.
Hyatt Regency Orlando, which is connected to Orange County Convention Center, allows RIDA and Ares to explore the traffic of a major tourist market.
“Hyatt has established Hyatt Regency Orlando as a landmark of its community’s vibrant business and leisure activity, and we are excited to work closely with the Hyatt team and advance our partnership with RIDA to realize the potential of this important location,” Andrew Holm, partner and co-head of Ares’ U.S. real estate investments said.
But the three parties aren’t done working together. Separately, Hyatt has agreed to allow RIDA and Ares to build a hotel, estimated to have 2,500 rooms, on 45 acres of land. It will be adjacent to the property in Orlando that the duo purchased. Hyatt has provided an extra $50 million in seller financing for the parcel.
The development agreement is subject to conditions. Plus, approvals and getting government support are needed. But if all goes well, the project will be constructed in multiple phases and the three parties will enter a long-term management deal.
‘We are excited to work with Hyatt to grow and enhance the Orange County Convention Center (OCCC) district and create a guest experience unparalleled for both group and leisure customers,” Ira Mitzner, president and CEO of RIDA said.
“We look forward to collaborating on a visionary public-private partnership with the State of Florida, Orange County, the OCCC, and all community stakeholders.”
The transaction of the Orlando property by Hyatt falls in line with its plans to sell hotels and reallocate the proceeds toward asset-light platforms. In the second quarter, the chain sold its 630-room property, Hyatt Regency San Antonio Riverwalk, for $230 million.
Since 2021, Hyatt has earned $2.6 billion in gross proceeds from sales, according to the company.