Braemar puts Four Seasons Scottsdale under contract for $372M

Braemar Hotels & Resorts has put the Four Seasons Resort Scottsdale under contract for $372 million, or $1.8 million per key.

The Dallas-based REIT says the sale rounds out roughly $1 billion of hotel dispositions and funds its break from manager Ashford.

The contract was signed Sept. 29 and announced Thursday, according to Bisnow. Braemar expects to complete the separation by the middle of next month, leaving the REIT fully self-managed.

The other disclosed sales already total $627.5 million. July's sale of The Ritz-Carlton Sarasota, the Hotel Yountville and the Bardessono Hotel and Spa brought $437.5 million. The Pier House Resort & Spa sold a month later for $190 million to a partnership of Sixth Street and Riller Capital. Adding the Scottsdale contract brings the total to $999.5 million.

Braemar will use the sale proceeds to pay a $480 million termination fee ending its management agreement with Ashford. The plan was announced in June, and the REIT's portfolio has been whittled down to seven luxury hotels as it shed assets following a strategic review of alternatives.

Braemar expects the termination to cut annual administrative expenses from $42 million to $15 million.

It also plans to refinance several assets over the next six months, which management expects will lower interest payments and produce nearly $5 million in additional savings.

The 2027 outlook disclosed alongside the sale projects a 7.7% operating profit margin at the midpoint, $400 million in total revenue and 5.5% revenue-per-available-room growth.

"With Four Seasons Resort Scottsdale under contract and our transition to self-management on schedule, Braemar is well positioned to deliver long-term value for our shareholders," CEO Richard Stockton said in a statement.

Braemar also resolved its dispute with Al Shams Investments Ltd., the vehicle of Saudi-Canadian businessman Wafic Rida Said. Under a cooperation and settlement agreement announced the same day, Al Shams will withdraw its notice of nominations to Braemar's board. In June, Al Shams had called the $480 million termination fee "theft dressed in a suit."

The seven hotels left after the sales are The Ritz-Carlton Reserve Dorado Beach; The Ritz-Carlton, St. Thomas; Capital Hilton; The Notary Hotel, Autograph Collection in Philadelphia; Sofitel Chicago Magnificent Mile; The Ritz-Carlton, Lake Tahoe; and Cameo Beverly Hills, LXR Hotels & Resorts.

The contract's $1.8 million-per-key price is above the $1 million-per-key floor Braemar reported on its closed sales. The three July hotels each went to separate LLCs, while Pier House drew the institutional partnership of Sixth Street and Riller Capital.