Braemar Hotels & Resorts(US:BHR)2025-03-12 20:20Hotel Properties Overview - The company owns interests in 15 hotel properties across seven states, the District of Columbia, Puerto Rico, and St. Thomas, U.S. Virgin Islands, totaling 3,807 rooms, with 3,667 net rooms after excluding joint venture partner contributions[13]. - Ashford LLC manages all hotel properties, focusing on maximizing operating performance and cash flow through strategic asset management[25]. - The company is advised by Ashford Hospitality Advisors LLC, which provides asset management and operational accountability for the hotel properties[14][19]. Financial Performance - The company’s total net income for the year ended December 31, 2024, was $30.07 million, with EBITDA of $179.03 million[30]. - For the year ended December 31, 2024, the total weighted average occupancy rate across all properties was 67.00%, with an average daily rate (ADR) of $465.21 and revenue per available room (RevPAR) of $311.68[30]. - Approximately 75% of rooms revenue was generated by transient business, 23% from group sales, and 2% from contract sales for the year ended December 31, 2024[29]. Capital Expenditures and Investments - The Notary Hotel has incurred approximately $62.8 million in capital expenditures since its acquisition in 2007, enhancing its facilities and services[45]. - The company intends to pursue a disciplined capital allocation strategy, selectively selling properties that no longer align with its investment strategy to redeploy capital into higher-return opportunities[28]. - The company plans to concentrate investments in markets with significant growth opportunities, considering factors like supply risk and potential for RevPAR increases post-renovation[23]. Revenue and Occupancy Rates by Property - Capital Hilton achieved an occupancy rate of 78.6% in 2024, up from 72.9% in 2023 and 65.2% in 2022[34]. - Average Daily Rate (ADR) for Capital Hilton increased to $262.26 in 2024, compared to $250.11 in 2023 and $228.36 in 2022, reflecting a growth of 4.6% year-over-year[34]. - Revenue per Available Room (RevPAR) for Capital Hilton rose to $206.23 in 2024, a 13.1% increase from $182.39 in 2023 and a 38.5% increase from $148.82 in 2022[34]. - Total revenue for Capital Hilton reached $65.134 million in 2023, up from $57.716 million in 2022, marking a growth of 12.3%[34]. - Marriott Seattle Waterfront reported a 73.0% occupancy rate in 2024, an increase from 70.7% in 2023 and 56.9% in 2022[38]. - The ADR for Marriott Seattle Waterfront was $307.67 in 2024, up from $298.39 in 2023 and $286.14 in 2022, indicating a year-over-year increase of 3.8%[38]. - RevPAR for Marriott Seattle Waterfront improved to $224.48 in 2024, a 6.8% increase from $210.94 in 2023 and a 38.0% increase from $162.75 in 2022[38]. - Total revenue for Marriott Seattle Waterfront was $38.776 million in 2023, compared to $34.629 million in 2022, reflecting a growth of 12.4%[38]. - The Notary Hotel reported a total revenue of $36,455,000 for 2024, up 10.9% from $33,117,000 in 2023 and 32.1% from $27,536,000 in 2022[49]. - The Notary Hotel's occupancy rate improved to 67.0% in 2024, compared to 62.4% in 2023 and 55.9% in 2022[49]. - Sofitel Chicago Magnificent Mile achieved total revenue of $37,568,000 in 2024, a 10.0% increase from $33,917,000 in 2023[53]. - The occupancy rate for Sofitel Chicago Magnificent Mile rose to 72.5% in 2024, up from 70.3% in 2023 and 65.4% in 2022[53]. - Total revenue for The Ritz-Carlton St. Thomas decreased to $74.375 million in 2024 from $75.394 million in 2023, down 1.4% year-over-year[66]. - Total revenue for the Park Hyatt Beaver Creek Resort & Spa decreased to $47.907 million in 2024 from $49.335 million in 2023, a decline of 2.9%[71]. - Total revenue for Hotel Yountville decreased to $14.711 million in 2024 from $15.296 million in 2023, a decline of 3.8%[76]. - Total revenue for The Ritz-Carlton Sarasota increased to $86.764 million in 2024 from $85.520 million in 2023, an increase of 1.5%[81]. - The Cameo Beverly Hills hotel generated total revenue of $13.139 million in 2023, down from $16.113 million in 2022[94]. - The Ritz-Carlton Reserve Dorado Beach achieved total revenue of $78.388 million in 2024, compared to $83.744 million in 2023[100]. - Total revenue for the year ended December 31, 2024, was $72,113,000, representing a 6.4% increase from $67,666,000 in 2023 and a 17.7% increase from $61,253,000 in 2022[105]. Debt and Financing Strategy - As of December 31, 2024, total indebtedness was approximately $1.2 billion, with a weighted average interest rate of 7.23% per annum[115]. - Approximately 92.9% of the company's debt bears interest at a variable rate of SOFR plus 3.55%[115]. - The company targets a leverage ratio of 35% net debt to gross assets for its financing strategy[116]. - The company intends to finance long-term growth through operating cash flow, equity issuances, and secured and unsecured debt financings[116]. Management Agreements and Fees - The company operates hotel properties through third-party management agreements, ensuring compliance with REIT regulations[145]. - Management fees for hotel properties range from 3.0% to 5.0% of gross revenues, with additional incentive fees based on operating income[147]. - The Capital Hilton has a management fee of 3% and an owner's priority return of 11.5% on a total investment of $174,950,115[147]. - The Marriott Seattle Waterfront has a management fee of 3% and an owner's first priority return of 10.75% on a total investment of $91,571,054[147]. - The Notary Hotel has a management fee of 4% and an owner's priority return of $9,053,011, with additional fees based on capital expenditures[148]. - The Ritz-Carlton St. Thomas has a management fee of 3.0% and an owner's priority return of $11,097,622[148]. - The Four Seasons Resort Scottsdale has a management fee of 3.5% and an owner's priority return of $19,741,351.59, which will be reduced to zero in January 2039[149]. Performance Metrics and Termination Clauses - The performance termination threshold for Marriott Seattle Waterfront is set at 9.5% of the total investment in the hotel, while The Clancy and The Notary Hotel have thresholds of 82.6% and 85% of the owner's priority return, respectively[156]. - The hotel's yield index must not fall below 90% to avoid performance termination under the Hilton management agreement[164]. - The management agreement allows for termination without a fee if the manager fails to achieve certain performance criteria over two consecutive fiscal years[155]. - The hotel management agreement allows termination without a fee if the hotel's RevPAR is less than 90% of its competitive set for two consecutive operating years[181]. - The adjusted net operating income must be above a hurdle amount of approximately $13.9 million plus 8% of capital expenditures to avoid performance termination[181]. Related Party Transactions and Advisory Agreements - The company has established a Related Party Transactions Committee to review conflicts involving related party transactions[144]. - The advisory agreement allows for the potential spin-off or transfer of assets to a new entity, which would also be advised by Ashford LLC[142]. - The company must reimburse Ashford LLC for all costs incurred in connection with the performance of its services, with no specific limitation on the amount[138].