Carey Watermark Investors and Carey Watermark Investors 2 Announce Acquisition
September 29, 2017 | Luke Schmidt | Blue Vault
On September 29, 2017, Carey Watermark Investors Incorporated (“CWI 1”) and Carey Watermark Investors 2 Incorporated (“CWI 2") announced that they had acquired Bacara Resort & Spa. Located on 78 oceanfront acres, the 358-room resort is one of a limited number of luxury oceanfront resorts on the California coast. Upon acquisition, the hotel was rebranded as a Ritz-Carlton resort and will be managed by the Ritz-Carlton Hotel Company, LLC.
The property recently completed a four-year renovation project totaling approximately $27 million, primarily to provide for new soft and case goods in guest rooms, technology upgrades, and a repositioning of food and beverage outlets. CWI 1 and CWI 2 plan to invest a significant amount of additional capital to further upgrade the resort, including enhancements to the meeting space, lobby, food & beverage outlets, fitness center, pool, and the 42,000 square foot spa, one of the largest on the West Coast.
Michael Medzigian, Chief Executive Officer of CWI 1 and CWI 2, said: "The acquisition of Bacara Resort & Spa represented the opportunity to acquire one of a select few true luxury California oceanfront resorts in a one-of-a-kind location. Given the lack of comparable sites, the difficulty, time and effort associated with obtaining approvals and entitlements as well as the enormous cost to construct a property of this scale and caliber, the property is truly irreplaceable from both a cost and opportunity standpoint. In conjunction with the acquisition we are extremely pleased to continue to expand on our already important relationship with The Ritz-Carlton and Marriott International and to work in partnership with them in the conversion of the property to a best-in-class Ritz-Carlton resort that will continue to serve as an integral part of the local community. This acquisition will represent the fifth Ritz-Carlton property in the CWI 1 and CWI 2 portfolios which include The Ritz-Carlton Fort Lauderdale, The Ritz-Carlton Key Biscayne, The Ritz-Carlton Philadelphia and The Ritz-Carlton San Francisco.
"We believe that the extensive, recently completed renovations and the Ritz-Carlton rebranding, in combination with our further investment in strategic property improvements and implementation of value-add operational enhancements, will increase overall profitability and reposition the property at the top of its competitive set within both the Santa Barbara and the luxury Southern California oceanfront resort markets. Consequently, we see Bacara as both a strategic and opportunistic acquisition that will enhance the overall quality of our portfolio, capitalizing on the significant potential for generating additional cash flow and building incremental long-term value for CWI 1 and CWI 2 investors."
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