Citing the rocky economic climate created by the coronavirus pandemic, Nashville-based Ryman Hospitality Properties Inc. has ditched its planned $275 million deal to buy the downtown Austin complex anchored by the W Austin hotel and ACL Live at the Moody Theater.
In December 2019, Ryman Hospitality Properties announced it would buy the Block 21 mixed-use development from Austin-based Stratus Properties Inc. Now, Ryman is exiting the deal and pay a $15 million cancelation fee to Stratus Properties. The $275 million deal would have included taking on $141 million in mortgage debt.
“In the current capital markets and economic environment caused by the COVID-19 pandemic, we have determined that it is not in the best interest of our shareholders to focus our resources and capital on this project at this time. We sincerely regret that the current circumstances do not permit us to complete the acquisition,” Colin Reed, chairman and CEO of Ryman, says in a May 22 release.
“We commend Stratus on their successful development of the Block 21 complex,” Reed adds, “and we know that it will have continued success when its businesses are able to return to full strength at the end of this global pandemic.”
In a May 22 release, Beau Armstrong, chairman, president, and CEO of Stratus Properties, says that he believes Block 21 is “a great asset” and that the company will now focus on the project’s “continued success in Austin.”
“We are disappointed that the sale of Block 21 to Ryman will not be completed; however, we understand Ryman’s termination given the intervening COVID-19 pandemic,” Armstrong says. “Ryman’s experience and depth in both the hospitality and music industries would have been a meaningful addition to the Austin community. We have tremendous respect for Ryman’s entire team and operations, and wish them well.”
Other than the 251-room W Austin and Austin City Limits Live at the 2,750-seat Moody Theater, Block 21 features office and retail space, along with the 350-seat 3TEN at ACL Live entertainment venue.
Ryman would have added Block 21 to a portfolio that includes Nashville’s Grand Ole Opry and Ryman Auditorium, and the Gaylord chain of hotels and resorts.
More than 100 potential buyers showed interest in purchasing Block 21 before Stratus picked Ryman as the winning bidder.