St. Regis Aspen owners aim to wow investors
February 9, 2018
Some of the key principals behind Elevated Returns, which owns the St. Regis Aspen Resort, wined and dined potential investors Thursday at the swanky lodge's Chefs Club on their final stop before 1.675 million of the hotel's shares are offered on the New York Stock Exchange, possibly as early as Friday.
Developers, property brokers and investment bankers, as well as an Aspen city councilman and the fire chief, were among those on hand to hear a presentation from Stephane De Baets, the president of New York-based Elevated Returns, who is trying to raise $33.5 million in the initial public offering.
"Why isn't there a product today where the general public can look at an asset and say, 'I like this hotel. I know it well. I like the people working there, I've stayed there, and I want a piece of it,'" De Baets said.
Represented by De Baets' Bangkok-based OptAsia Capital Co. Ltd, 315 Dean Associates Inc. acquired the five-star St. Regis for $70 million in September 2010 during the recession. Since then, $50 million has been put into renovations. Currently a 179-guestroom hotel, it opened in 1992 as a Ritz-Carlton Hotel before being converted to the St. Regis in 1998.
For the past four weeks, De Baets and his crew have been speaking with private investors and institutions in Chicago, Denver, New York, San Francisco and other locales about investing in what is called Aspen REIT and traded as "AJAX" on the NYSE. The stock will be offered through a Regulation A-plus IPO, which allows anyone to invest.
This month's IPO has Elevated Returns putting up the shares for sale at $20 each. Elevated plans to keep 51 percent of the shares, said De Baets, who has touted the IPO as the first of its kind in the United States for a single-asset real estate investment trust, commonly called an REIT.
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"Owning a piece of it means you have the same economics as the institution of the millionaire owning a hotel," De Baets told the near-capacity crowd. "So that's what we created. We created a listed security that has one and only one purpose, which is to own a trophy asset.
"What you see is what you get. When you look at our financials, it's very easy to understand because there is only one set of financials."
The St. Regis Aspen is managed by a subsidiary of Marriott International, which merged with Starwood Hotels & Resorts Worldwide in September 2016. Neither Marriott nor Starwood, nor the residential component of the St. Regis, have an ownership interest in the resort hotel. The Chefs Club, which leases space at the St. Regis, also would not be included in the IPO.
Audience members peppered De Baets with questions, including the impacts of climate change on ski-town economies.
"If there's no more snow," he said, "then I guess then the clever people of Aspen will find other reasons to tell the people it's a beautiful city. One thing I know is we are as successful in the summer as we are in the winter, and you know the city is amazing. … I have no doubt that if there is global warming, first of all it will be a global problem; it won't just be an Aspen problem."
De Baets said he expects Aspen REIT to pay out a 5.8 percent annual dividend, but said there are no guarantees.
For the nine months that ended Sept. 30, St. Regis rang up $22.9 million in room revenue, according to the its circular offering. For the year that ended Dec. 31, 2016, it had room revenue of $28.7 million.
Total revenue for the first nine months of this year were $34.9 million and $42.6 million for all of 2016.
Total operating expenses were $16.8 million from January through Sept. 30, and $20.2 million for the entire 2016.
The circular also notes, "Upon the completion of this offering and the contribution transactions, our only long-term debt is expected to be a $120 million mortgage on the St. Regis Aspen Resort."
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