Hyatt Regency Orlando sold for $1.07bn: A major milestone in Hyatt’s asset strategy

Hyatt Hotels Corporation has finalised the sale of the Hyatt Regency Orlando for approximately $1.07 billion, a landmark transaction in its capital allocation strategy. This deal, executed by an affiliate of Hyatt, includes the sale of the 1,641-room Hyatt Regency Orlando and 45 adjacent acres to affiliates of RIDA Development Corporation and an Ares Management Real Estate fund. Despite this sale, Hyatt will retain a long-term management agreement under the Hyatt Regency brand. Additionally, Hyatt has retained $265 million in non-controlling preferred equity and provided $50 million in seller financing for the adjacent land.

This transaction is a pivotal part of Hyatt’s broader strategy to transition from owning hotels to focusing on asset-light platforms. The sale surpasses Hyatt’s previously announced $2 billion asset-disposition commitment, which was set in 2021. Over the past three years, Hyatt has realised $2.6 billion in gross proceeds, net of acquisitions, achieving a 13.3x multiple on its investments. This strategic shift is aimed at enhancing growth and profitability by reallocating capital to more lucrative ventures.

Hyatt Regency Orlando: A Major Asset in the Hospitality Market

The Hyatt Regency Orlando, the fourth-largest Hyatt hotel globally by room count, features 1,641 rooms and 315,000 square feet of flexible event space. This hotel is a significant player in the Orlando hospitality market, drawing over one million guests and attendees annually. Its prime location near major Orlando attractions and direct connection to the Orange County Convention Center—one of the largest convention facilities in the U.S.—makes it a highly sought-after venue.

Orlando, known for its robust tourism industry, remains a key market. The Hyatt Regency Orlando’s strategic location and extensive facilities cater to both business and leisure travellers, providing a critical link to the city’s thriving convention and event sector.

New Development Plans: The Grand Hyatt Orlando

As part of the sale, RIDA Development Corporation and Ares Management have entered into a development agreement with Hyatt to build a new Grand Hyatt hotel on the 45-acre parcel adjacent to the Hyatt Regency Orlando. The planned Grand Hyatt Orlando is expected to feature approximately 2,500 rooms and will be developed in phases. This new development is set to further enhance Hyatt’s footprint in the high-demand Orlando market, combining the Hyatt Regency Orlando and Grand Hyatt Orlando to offer over 4,000 guestrooms.

This project reflects Hyatt’s strategy to expand its presence in high-traffic destinations. The Grand Hyatt Orlando will cater to both group and leisure customers, capitalising on Orlando’s status as a premier destination for conventions and tourism. The development is expected to create significant economic impact, including job creation and increased tourism revenue.

Strategic Partnership and Future Prospects

Mark S. Hoplamazian, President and Chief Executive Officer of Hyatt, noted, “The sale of Hyatt Regency Orlando represents the largest single-asset sale in Hyatt’s history. We are excited to collaborate with RIDA and Ares on this landmark transaction and expand our brand presence in the most-visited destination in the U.S. with a new Grand Hyatt hotel.”

RIDA Development Corporation President and CEO Ira Mitzner expressed enthusiasm about the partnership, stating, “We are thrilled to partner again with Ares on this historic transaction. Our collaboration with Hyatt will enhance the Orange County Convention Center district and deliver an unparalleled guest experience. We look forward to working with local stakeholders to realise this vision.”

Andrew Holm, Partner and Co-Head of U.S. Real Estate Investments at Ares Management, added, “Hyatt has established Hyatt Regency Orlando as a landmark within its community. We are eager to work with Hyatt and RIDA to unlock the full potential of this key location and create lasting value in this vibrant market.”

Market Impact and Industry Implications

The sale and upcoming development have significant implications for the hospitality and real estate sectors. The substantial investment in the Grand Hyatt Orlando is expected to bolster Orlando’s reputation as a leading convention and tourist destination. The expansion aligns with broader industry trends where major hotel brands are focusing on strategic asset sales and development partnerships to maximise value and adapt to evolving market demands.

This transaction underscores the increasing importance of asset-light strategies in the hospitality industry, where companies seek to optimise capital deployment and drive growth through strategic partnerships and high-impact developments. The collaboration between Hyatt, RIDA, and Ares represents a model for future large-scale hospitality projects, combining established brand presence with innovative development strategies to enhance market positioning and drive long-term success.