BRAEMAR HOTELS & RESORTS COMPLETES NEW FINANCING FOR THE RITZ-CARLTON RESERVE DORADO BEACH
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The closure of a property-level mortgage financing for Braemar Hotels & Resorts Inc. represents a strategic financial move, leveraging the current lending market conditions. The $62 million non-recourse loan, with its two-year term and interest-only payment structure, indicates a calculated risk management approach. The SOFR + 4.75% floating interest rate could be seen as advantageous, given the potential for interest rate fluctuations over the short term. Investors should note that this type of financing could improve the company's liquidity and enable further investments or debt restructuring.
REITs like Braemar Hotels & Resorts are typically evaluated on their ability to generate income and manage debt efficiently. The financing of the Ritz-Carlton Reserve Dorado Beach could signal to investors a positive outlook on the luxury hotel market, especially in tourist-centric locations like Puerto Rico. The non-recourse nature of the loan minimizes the company’s liability, potentially making the investment more attractive. However, the reliance on a floating interest rate pegged to SOFR could introduce variability in interest expenses, which stakeholders should monitor closely.
The luxury hotel segment has unique dynamics that affect its financial health. The Ritz-Carlton Reserve Dorado Beach is positioned in a niche segment, catering to high-end clientele. The financing obtained by Braemar Hotels & Resorts could facilitate operational enhancements or expansions that cater to the evolving expectations of luxury travelers. This could lead to increased revenue per available room (RevPAR), a critical metric in the hospitality industry. However, the success of such investments hinges on maintaining high occupancy rates and guest satisfaction in a competitive market.
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"We are pleased to capitalize on the current favorable conditions in the lending markets to secure this attractive financing of the iconic Ritz-Carlton Reserve Dorado Beach," said Richard J. Stockton, Braemar's President and Chief Executive Officer. He continued, "Looking ahead, hotel debt capital markets continue to improve, which we believe will continue to reduce the Company's interest expense on future financings."
Braemar Hotels & Resorts is a real estate investment trust (REIT) focused on investing in luxury hotels and resorts.
Forward-Looking Statements
Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, among others, statements about the Company's strategy and future plans. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Braemar's control.
These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: our ability to repay, refinance or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; risks associated with our ability to effectuate our dividend policy, including factors such as operating results and the economic outlook influencing our board's decision whether to pay further dividends at levels previously disclosed or to use available cash to pay dividends; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Braemar's filings with the Securities and Exchange Commission.
The forward-looking statements included in this press release are only made as of the date of this press release. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations, or otherwise, except to the extent required by law.
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SOURCE Braemar Hotels & Resorts Inc.
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