HGV forms joint venture to purchase Elara resort
Hilton Grand Vacations (HGV) has formed a joint venture with affiliates of Blackstone Real Estate Partners to purchase Elara, a Hilton Grand Vacations Club.
Elara is located in Las Vegas, and with 1,201 units is one of the world’s largest timeshare resorts. HGV will assume a 25 per cent stake in the joint venture for approximately $40 million, which is expected to be accretive to HGV’s total adjusted EBITDA and EPS.
Mark Wang, HGV’s president and CEO, said the acquisition would advance one of the company’s key strategic priorities, namely “growth through opportunistic business ventures, which allows us to continue to maximise shareholder value”.
He added: “By taking an ownership stake in Elara, which has more than 500 units of sellable inventory remaining, we are receiving a strong-performing consumer loan portfolio and unfinished penthouse floors.”
In addition to its ownership stake, HGV – which has a number of resorts affiliated to RCI – will continue to market, sell and manage Elara under existing fee-for-service agreements.
The joint-venture structure allows HGV to generate strong returns while maintaining flexibility for additional growth opportunities. The transaction is expected to be funded by existing cash on HGV’s balance sheet.
Elara is located on East Harmon Avenue in Las Vegas and opened as the largest, single timeshare resort in the world in 2009. The property offers adjoining access to the Miracle Mile Shops, offering more than 200 stores and restaurants. The upscale, 15,000-square-foot, grand lobby overlooks a 40,000-square-foot elevated tropical pool with two hot tubs, pool bar and grill and 33 private cabanas.
In addition to the 1,201 units, there are four penthouse floors with more than 82,000 square feet, among other undeveloped areas including 2,300 square feet of retail space fronting East Harmon Avenue and more than 17,000 square feet of ballroom space.