Ryman Hospitality Properties Inc. agreed to purchase Stratus Properties Inc.'s Block 21 mixed-use real estate development and entertainment business in downtown Austin, Texas, for $275 million.
The complex consists of the 2,750-seat Austin City Limits Live at the Moody Theater, as well as the 251-room W Austin Hotel, the 350-seat 3TEN at ACL Live Club, and 53,000 square feet of other class A commercial space.
The deal, which includes the assumption of existing mortgage debt, is slated to be completed in the first quarter of 2020, subject to customary closing conditions.
Separately, Ryman said it plans to sell 3.0 million common shares in an underwritten public offering to partly fund the acquisition, among other uses.
The hotel real estate investment trust expects to grant a 30-day option to the underwriters to acquire up to 450,000 additional shares.
Based on the REIT's Dec. 9 closing stock price of $89.07 per share, gross proceeds are expected to equate to about $307.3 million, including the additional-share option.
Stratus said it is contemplating options for the use of the net proceeds from the sale and for its future real estate development and leasing operations. The company expects to hire a financial adviser to help in its evaluation of its options following the sale completion.
BofA Securities, J.P. Morgan and Wells Fargo Securities are joint book-running managers for the offering.