#United States #Dallas #Hotels #Resorts #Braemar

Braemar Hotels & Resorts Initiates Sale Process

On August 26, 2025, Braemar Hotels & Resorts Inc., listed on NYSE under the ticker BHR, announced its decision to begin the process of selling the company. The decision was made by the Board of Directors, who have formed a Special Committee of independent directors to explore various strategic options that will be aimed at maximizing shareholder value in both the near and long term.

The company’s portfolio, primarily consisting of luxury hotels, has consistently reported the highest Revenue Per Available Room (RevPAR) among publicly traded lodging Real Estate Investment Trusts (REITs). As of June 30, 2025, Braemar's RevPAR saw a growth of 2.9%, significantly higher than the overall U.S. hotel industry’s growth of 0.8%. This strong performance can be attributed to the prime locations of its properties and limited competition, making them highly attractive to potential buyers.

The portfolio includes nine resort properties and five urban hotels, recognized under esteemed brands like Ritz-Carlton Reserve, Four Seasons, and Park Hyatt. Richard Stockton, the CEO of Braemar Hotels & Resorts, expressed confidence in attracting significant interest from private market buyers, driven by improving economic conditions and healthy consumer spending in the hospitality sector.

Braemar has faced substantial shareholder activism in recent years, raising concerns about its performance amidst the traditionally low EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) multiples observed in lodging REITs. This pattern resembles previous occurrences with Strategic Hotel Resorts, which ultimately led to their acquisition after a prolonged undervaluation.

In light of these market dynamics, the Board concluded that pursuing a sale is the most prudent strategy. Braemar’s strategic partners, including Robert W. Baird Co. Inc., have been engaged to facilitate this process. They are currently soliciting interest from potential buyers and arranging customary information sharing.

In conjunction with this sale process, Braemar has reached an agreement regarding its advisory fees with Ashford Inc., representing a significant discount compared to standard expectations. The agreed-upon fee of $480 million reflects a mutual understanding between the parties involved, considering the current market conditions and the potential for a change of control of the company.

Given the sustained disconnection between Braemar’s share price and its intrinsic value, the Board believes that initiating a sale process offers the best opportunity for shareholders to realize a premium over the current share prices. Becky Odino-Johnson, Chairperson of the Special Committee, noted that although they explored other options such as internalizing management, the firm’s value proposition led them to the conclusion that a sale is in the best interest of the shareholders.

As the company progresses with this process, they remain dedicated to executing their business plans and optimizing returns from their portfolio. With notable insights from industry leaders, there is an expectation that the sale process will yield attractive valuations, primarily due to the uniqueness and high-quality nature of its hotel assets.

The Braemar brand, established in 2013, focuses on luxury resort investments and has seen significant growth over the years. The company not only owns high-value hotel properties but also possesses additional land at several key assets, including Ritz-Carlton and Four Seasons locations, which adds to its market appeal.

While no strict timeline for the sale process has been established, Braemar has emphasized that they will only disclose developments once the Board has approved a specific transaction or if there is a legal requirement to do so. The company continues to work closely with its financial and legal advisors to navigate through this critical juncture in its evolution.

As Braemar prepares for potential suitors, it is poised to attract global interest, presenting a rare opportunity in the luxury lodging market that is not frequently available. The Board remains focused on creating shareholder value while advancing its strategic objectives in the face of current market challenges.