Home News & Features Cavallo Point, The Lodge at The Golden Gate Bridge in Sausalito Sold

Cavallo Point, The Lodge at The Golden Gate Bridge in Sausalito Sold

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BETHESDA, MD.—DiamondRock Hospitality Co. announced that it has acquired Cavallo Point, the Lodge at the Golden Gate, a premier luxury hotel located in the Golden Gate National Recreation Area in Sausalito, Calif. Cavallo Point is situated at the base of the Golden Gate Bridge with sweeping views of the San Francisco Bay. The Lodge has consistently been recognized by Conde Nast Traveler and Travel + Leisure as one of the top luxury hotels and one of the most sustainable in the world. The acquisition represents a 12.8x multiple on trailing 12-month EBITDA.

Cavallo Point enjoys one of the most unique and attractive locations in the San Francisco Bay Area as an integrated part of the scenic waterfront community of Sausalito with breathtaking views of the Golden Gate Bridge. The Hotel, which achieved LEED Gold certification for its environmentally sustainable design and construction, spans 45 acres and features 142 guestrooms and suites with over 14,600 square feet of meeting space, as well as entitlements for significantly expanding the property in the future. The hotel’s expansive collection of amenities features the award-winning Murray Circle restaurant and Farley Bar, Cavallo Point Cooking School, Healing Arts Center & Spa, outdoor pool, fitness center, retail space and art gallery.

The acquisition of Cavallo Point has many portfolio benefits for DiamondRock, including increasing the company’s exposure to West Coast markets, the resort segment, and independent hotels. In addition, the hotel will be the company’s second highest RevPAR ($306) property and highest Total RevPAR ($809) hotel. The company does not anticipate the hotel to materially contribute to the company’s EBITDA during the remainder of 2018.

Increases Company’s Resort & San Francisco Exposure

“Cavallo Point is a truly unique opportunity to acquire an irreplaceable, luxury asset in the San Francisco market, which increases both our resort and San Francisco exposure,” said Mark Brugger, President and CEO of DiamondRock. “This acquisition is consistent with our strategy to invest in high-quality destination resorts in high barrier-to-entry markets. With its unique location and wide range of services and amenities, Cavallo Point competes with many of the top luxury resorts in Northern California, as well as hotels in San Francisco’s central business district. Furthermore, we see numerous opportunities to utilize our asset management best practices, as well as implement other value-add expansion opportunities.”

Cavallo Point will continue to be managed by Passport Resorts LLC, a San Francisco Bay Area hotel management company, known for its management of high-end destination resorts, including the Post Ranch Inn in Big Sur, Calif. Passport Resorts’ properties are located in iconic settings and provide guests with first-class services, amenities, and cuisine. Passport Resorts’ business practice is to operate its properties in an environmental and socially responsible manner.

The acquisition was funded through a combination of cash on hand, proceeds from a new unsecured term loan and the issuance of common limited partnership units in the company’s operating partnership (“OP Units”). The company issued 796,684 OP Units in connection with the transaction at $11.76 per unit. Additionally, the company has entered into a new five-year $50 million unsecured term loan for purposes of maintaining qualified non-recourse debt associated with the property. The interest rate on the term loan is based on a pricing grid ranging from 140 to 220 basis points over LIBOR, based on the company’s leverage ratio. The interest rate is currently 145 basis points over LIBOR.

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