Host Hotels to Invest $118M in Three New Properties

BETHESDA, MD-After posting strong results for the first quarter of 2012 and after spending several quarters shoring up its balance sheet and tapping the capital markets to build up a war chest, Host Hotels & Resorts is firing up its development pipeline for both the domestic and global markets. The REIT announced Tuesday that it plans to develop two hotels in Rio de Janeiro. It is also building a property in Nashville via a joint venture.

Host Hotels has acquired land and entered into a construction agreement with Galwan Engineering and Performance Realty to develop a 150-room Novotel hotel and a 255-room ibis hotel in Rio de Janeiro for approximately $72 million. Accor will manage the hotels. Construction is scheduled to begin in July 2012, with an opening date projected for mid-year 2014.

Not surprisingly the hotels are being developed with an eye to servicing the expected visitors for the 2016 Olympic Games. The two hotels will be located less than one mile from the future Olympic Park, in the Barra da Tijuca submarket.

The REIT, which already has a presence in Brazil, likes the market because of its strong economy, growth potential and a limited number of existing hotel rooms, W. Edward Walter, president and chief executive officer, said in a prepared statement. “Our first investment in Brazil, the JW Marriott in Rio, has significantly exceeded our projections and has been a great investment for the company and we are pleased to build upon this success," he adds.

For the Nashville project, Host Hotels has entered into a joint venture with White Lodging Services to develop a 255-key Hyatt Place for $46 million, including the purchase of the land. The JV will finance a significant portion of the project.

Hyatt Place Nashville will be located in the city’s downtown area, one block from the new Music City Center—a 1.2-million-square-foot convention center scheduled to open in 2013. It will be the first Hyatt in downtown Nashville when it opens in December of next year. The REIT did not return a call to GlobeSt.com in time for publication.