Amid downturn, buyer calls off deal to buy Austin's W Hotel block
Austin-based Stratus Properties Inc. said Friday that its planned $275 million sale of the downtown block that houses the W Austin Hotel has been called off.
Stratus agreed in December to sell the property, which is also home to Austin City Limits Live at the Moody Theater, as well retail and office space and the 3TEN ACL Live entertainment venue and business, to Nashville-based Ryman Hospitality Properties.
Ryman has decided to terminated the purchase agreement, Stratus said. Ryman will forfeit $15 million of earnest money deposited in escrow as part of the agreement, Stratus said.
Stratus CEO Beau Armstrong said his firm is "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."
"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. We believe Block 21 is a great asset and we remain focused on its continued success in Austin," Armstrong said in a written statement.
Colin Reed, Ryman's chairman and CEO, said that the economic downturn caused by the coronavirus outbreak led to the decision to terminate the purchase agreement.
"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," Reed said in a written statement.
Ryman owns and operates media, entertainment and lodging properties including the legendary Grand Ole Opry, which broadcasts a weekly country music showcase. Ryman's assets also include destination hotels in urban and resort markets. They include several upscale, meetings-focused resorts that are managed by Marriott International under the Gaylord Hotels brand.
When announcing the planned sale in December, Armstrong said that the Block 21 listing had generated interest from a number of potential buyers.
"We had over 100 people sign confidentiality agreements, we had 20-plus in-depth property tours, a couple rounds of bidding and a number of very high-profile suitors," he said at the time.