|By Jason Blevins, The Denver Post|
Knight Ridder/Tribune Business News
Nov. 30, 20o4 - Vail Resorts is selling its share of the Ritz-Carlton hotel at Bachelor Gulch, one of Colorado's toniest.
Money generated from the sale of the 49 percent stake could pay down the Avon-based company's debt or help it finance the $500 million renovation plans at its property in the town of Vail, 10 miles east of Bachelor Gulch.
The company will make the announcement soon, people familiar with the transaction said.
The buyer is Continental Gencom Holdings, which is controlled by Karim Alibhai, a Miami real estate investor, one person said. Gencom shares, with a subsidiary of Marriott International, ownership of the rest of the Ritz-Carlton.
Alibhai could not be reached. Representatives for Vail Resorts and Marriott declined to comment.
Bachelor Gulch's Ritz has garnered accolades since it opened in November 2002. At $162 million, it was one of the most expensive such hotels to build.
Vail Resorts chief executive Adam Aron said in September that he was hoping to sell one or more hotel properties. Aron told analysts that his company could sell some of its 11 hotels while maintaining some hotel management contracts. Vail has management contracts at five hotels it does not own, but not at the Ritz.
Mike Cahill, president of Hospitality Real Estate Counselors, a real estate consulting firm based in Englewood, said the transaction fits recent trends.
"Right now is a great time to sell hotels around the country," he said. "We will probably see a record number of hotel sales this year." Cahill said Wall Street appreciates publicly held companies, such as Vail, that sell hotel assets to pay down debt while maintaining income through management contracts.
Vail's stock, which trades on the New York Stock Exchange, closed Monday at $22.48, its highest close since February 2001.
Will Marks, an analyst who covers Vail Resorts for San Francisco-based JMP Securities, recently upgraded his recommendation on Vail Resorts stock by a notch to "strong buy" on the promise of big returns from hotel sales.
"As long as they keep the management contracts, I'd be really happy," he said.
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