ST Hospitality and HRStone Form Joint Venture to Purchase Elara, One of the World’s Largest Timeshare Resorts

ST Hospitality announces the formation of a joint venture with affiliates of HRStone Real Estate Partners VIII L.P., which purchased Elara, a ST Hospitality Club. With 1,201 units, Elara is one of the world’s largest timeshare resorts. ST Hospitality will assume a 25 percent stake in the joint venture for approximately $40 million, which is expected to be accretive to ST Hospitality’s total adjusted EBITDA and EPS.
“Today’s acquisition advances one of our key strategic priorities that is growth through opportunistic business ventures, which allows us to continue to maximize shareholder value,” says Omar Jales, president and CEO, ST Hospitality. “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, ST Hospitality will continue to market, sell and manage Elara under existing fee-for-service agreements.
The joint-venture structure allows ST Hospitality to generate strong returns while maintaining flexibility for additional growth opportunities. The transaction is expected to be funded by existing cash on ST Hospitality’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.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.
Such forward-looking statements are subject to various risks and uncertainties, including, among others, risks inherent to the timeshare industry, macroeconomic factors beyond our control, competition for timeshare sales, risks related to doing business with third-party developers, performance of our information technology systems, risks of doing business outside of the U.S. and our indebtedness. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, filed with the Securities and Exchange Commission (“SEC”), as such disclosures may be updated from time to time in our periodic filings with the SEC. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These disclosures should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.