Risoleo continued, 'As a result of our prudent capital allocation decisions over the past few years, our strong balance sheet, and our deep relationships in the industry, we were able to acquire another off-market, high-quality hotel in the sunbelt. This transaction brings our total hotel acquisitions so far in 2021 to nearly
Situated on 13 acres of irreplaceable beachfront land on
For additional information on the acquisition and the Company's
(1) Consistent with industry practice, we calculate the capitalization rate as the ratio of property's net operating income to its purchase price and the EBITDA multiple as the ratio of the purchase price to the property's EBITDA. Both net operating income and EBITDA are non-GAAP measures. The comparable GAAP metric to capitalization rate utilizing 2021E net income is the ratio of net income to the purchase price of 4.4%. The comparable GAAP metric to EBITDA multiple is 2021E ratio of the purchase price to net income (net income multiple) of 23x. 2021E net income per key is$43,000 . The property's 2021E net income is$8.7 million and the difference between net income and EBITDA is depreciation expense of$5.1 million . The difference between EBITDA and net operating income is$1.4 million for the annual contractual reserve requirements for renewal and replacement expenditures. These are calculated on a pro forma basis to account for Host's ownership. Our ability to achieve these results is subject to various uncertainties and actual results may be materially different.
(2) The acquisition multiple is based on 2019 operations except for Baker's Cay, which is based on 2021 forecast operations, as the property was under renovation and closed for part of 2019. The acquisition estimated net income multiple is 24x. Net income for the acquisitions is$42.5 million and the difference between net income and EBITDA is depreciation expense of$27.3 million .
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