Hotel real estate investment trust Braemar Hotels & Resorts revealed its new shareholder creation plan, which includes the sale of the 394-room Hilton La Jolla Torrey Pines for $165 million. Other terms were not disclosed.
The company is also looking at two more potential sales to be completed in 2024 and 2025, respectively.
Using cash on hand, the REIT also fully repaid the outstanding $30 million loan for the 143-room Cameo Beverly Hills hotel in Los Angeles. Additionally, the company announced plans to redeem $50 million of its non-traded preferred and/or public preferred stock this year, utilizing proceeds from the sale of the Hilton Torrey Pines. Any redeemed preferred stock will no longer be outstanding, and dividends will no longer accrue on such securities. The redemption announced today reflects the company's ongoing efforts to enhance the efficiency of its funding and capital structure.
The company also announced that its board of directors has authorized a new stock repurchase program of up to $50 million. The company intends to begin share repurchases as soon as practicable and may repurchase shares through open market transactions, privately negotiated transactions or other means. The timing and amount of any transactions will be subject to the discretion of the company based upon market conditions, and the program may be suspended or terminated at any time by the company at its discretion without prior notice.
"Today's announcements reflect our commitment to reduce the company's dividend and interest expense, enhance our capital structure and financial flexibility, as well as create value for our shareholders," Braemar President and CEO Richard Stockton said in a statement. "The planned sale of the Hilton La Jolla Torrey Pines at an attractive cap rate demonstrates the high-quality nature of the Braemar portfolio. We continue to be excited about the future prospects for Braemar."