Hyatt Quickly Unloads Playa Real Estate Portfolio for $2B

Hyatt Hotels is selling the real estate portfolio that belonged to Playa Hotels & Resorts after all of a dozen days.

Hyatt agreed to sell Playa’s real estate portfolio to Tortuga Resorts for $2 billion, Reuters reported. The portfolio includes 15 resort assets in Mexico, Jamaica and the Dominican Republic.

Hyatt announced its acquisition of Playa in February for $2.6 billion, but the merger did not close until June 17. The deal with Tortuga was reached on June 29, according to a securities filing; Tortuga is a joint venture of KSL Capital Partners and Rodina.

With the deal, Hyatt’s net acquisition price for Playa drops to $555 million.

“The planned real estate sale to Tortuga transforms the acquisition of Playa into a fully asset-light transaction and increases Hyatt’s fee-based earnings,” Hyatt CEO Mark Hoplamazian said in a statement.

As part of the deal, Hyatt and Tortuga are entering into 50-year management agreements for all but two of the properties. Terms will be consistent with Hyatt’s existing all-inclusive management fee structure, while the other two properties will be under separate arrangements; Hyatt will retain $200 million of preferred equity in connection with the real estate deal.

The transaction is expected to close by the end of the year and is subject to regulatory approval in Mexico. Hyatt will use the proceeds to pay down a loan used in the Playa acquisition; it already owned a 9.4 percent stake in Playa prior to the deal.

Hyatt always planned to sell the Playa properties upon closing the deal, expecting to do so by the end of 2027 and recouping at least $2 billion in proceeds; that timeline proved to be longer than necessary.

Hyatt’s been on an asset-light approach. Last year, the company acquired the Standard International brand for up to $335 million, picking up the Standard’s management, franchise and license contracts. Hyatt has also acquired brands such as Alila and Dream Hotels while offloading physical properties.

The company anticipates its asset-light earnings mix may reach at least 90 percent by 2027.

— Holden Walter-Warner