What agreements did The Standardx enter into upon the sale of Hyatt Regency Orlando?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
yatt Regency Orlando and an adjacent undeveloped land parcel to an unrelated third party. We received $723 million of cash consideration, net of cash disposed, closing costs, and proration adjustments, and accounted for the transaction as an asset disposition.
In conjunction with the sale, we received a $265 million preferred equity investment in the parent of the third-party entity that owns the property. Upon sale, we estimated the fair value of our preferred equity investment, which is redeemable at our option on various dates starting in 2030, to be approximately $188 million and recorded a HTM debt security within other assets on our consolidated balance sheet (see Note 4). The fair value was estimated using a probability-based discounted future cash flow model and includes assumptions and judgments regarding the probability weighting, discount rates, and expected timing of payments, which are primarily Level Three assumptions.
Additionally, we provided $50 million of seller financing with an initial maturity date of five years for the adjacent undeveloped land parcel. Upon sale, we estimated the fair value of the seller financing to be approximately $34 million and recorded an unsecured financing receivable on our consolidated balance sheet (see Note 6). The fair value was estimated using a discounted future cash flow model and includes assumptions and judgments regarding the discount rate and expected timing of payments, which are primarily Level Three assumptions.
Upon sale, we entered into a long-term management agreement for the property and a development agreement for the adjacent undeveloped land parcel. The sale resulted in a $514 million pre-tax gain, which was recognized in gains (losses) on sales of real estate and other on our consolidated statements of income during the year ended December 31, 2024. The operating results and financial position of this hotel prior to the sale remain within our owned and leased segment.
Park Hyatt Zurich—During the year ended December 31, 2024, we sold Park
Source: Item 23 — Receipts (FDD pages 85–132)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, upon the sale of Hyatt Regency Orlando during the year ended December 31, 2024, The Standardx entered into a long-term management agreement for the property and a development agreement for the adjacent undeveloped land parcel. The sale of the Hyatt Regency Orlando and the adjacent land parcel to an unrelated third party resulted in The Standardx receiving $723 million in cash consideration, net of cash disposed, closing costs, and proration adjustments. The transaction was accounted for as an asset disposition.
In addition to the cash consideration, The Standardx received a $265 million preferred equity investment in the parent of the third-party entity that now owns the property. The fair value of this preferred equity investment was estimated to be approximately $188 million. The Standardx also provided $50 million of seller financing with an initial maturity date of five years for the adjacent undeveloped land parcel, with its fair value estimated at approximately $34 million.
The sale of Hyatt Regency Orlando resulted in a $514 million pre-tax gain for The Standardx, which was recognized in gains (losses) on sales of real estate and other on the company's consolidated statements of income for the year ended December 31, 2024. However, the operating results and financial position of the hotel prior to the sale remained within The Standardx's owned and leased segment.