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Braemar closes $120M Calif. property buy, signs new funding program with Ashford

Braemar Hotels & Resorts Inc. completed its $120 million acquisition of the 170-room Ritz-Carlton Lake Tahoe in Truckee, Calif., and entered into an enhanced return funding program agreement with Ashford Inc.

The luxury hotel and resort real estate investment trust said the total consideration for the property consisted of $103.3 million for the hotel, $8.4 million for a 3.4-acre undeveloped land parcel and $8.3 million for capital reserves. The seller was Kennedy-Wilson Holdings Inc., and Ritz-Carlton will remain the hotel manager.

Braemar also closed on a $54 million nonrecourse mortgage loan secured by the property. The five-year, interest-only loan bears interest at the London interbank offered rate plus 2.10%.

Under the terms of the funding program, which will replace Ashford's legacy Key Money concept, Ashford agreed to provide up to $50 million to the REIT in connection with its acquisition of additional hotels. By mutual agreement, the program can be upsized to $100 million.

Ashford said it will provide 10% of the acquisition price of each hotel bought by Braemar, for up to $500 million in total acquisitions. It expects to finance the program over the long-term with about 50% cash on hand and 50% debt.

Ashford agreed to provide approximately $10.3 million to Braemar in connection with its purchase of the Ritz-Carlton Lake Tahoe, which is expected to be the REIT's first hotel acquisition to benefit from the new Ashford funding program.