BRAEMAR HOTELS & RESORTS ENTERS INTO FRANCHISE AGREEMENT FOR THE SOFITEL CHICAGO MAGNIFICENT MILE
Braemar Hotels & Resorts (NYSE: BHR) has announced plans to transition the 415-room Sofitel Chicago Magnificent Mile to a franchise structure, effective May 2025. Under this new arrangement, the hotel will maintain its Sofitel branding while being managed by Remington Hospitality under existing terms of its Master Hotel Management Agreement with Braemar.
Current employees will receive offers to maintain their positions under Remington Hospitality's subsidiary. While no mandatory property improvement plan is required for the conversion, Braemar plans to renovate the hotel's lobby, restaurant, and meeting space over the next two years.
According to CEO Richard J. Stockton, the company expects an immediate increase in property value due to the retention of the Sofitel brand and the management agreement with Remington being terminable upon sale.
Braemar Hotels & Resorts (NYSE: BHR) ha annunciato piani per trasformare il Sofitel Chicago Magnificent Mile, composto da 415 camere, in una struttura in franchising, a partire da maggio 2025. Sotto questo nuovo accordo, l'hotel manterrà il marchio Sofitel mentre sarà gestito da Remington Hospitality in base ai termini esistenti del suo Master Hotel Management Agreement con Braemar.
I dipendenti attuali riceveranno offerte per mantenere le loro posizioni sotto la sussidiaria di Remington Hospitality. Sebbene non sia richiesto un piano obbligatorio di miglioramento della proprietà per la conversione, Braemar prevede di ristrutturare la hall, il ristorante e gli spazi per riunioni dell'hotel nei prossimi due anni.
Secondo il CEO Richard J. Stockton, l'azienda si aspetta un immediato aumento del valore della proprietà grazie alla conservazione del marchio Sofitel e al contratto di gestione con Remington, che può essere risolto in caso di vendita.
Braemar Hotels & Resorts (NYSE: BHR) ha anunciado planes para transformar el Sofitel Chicago Magnificent Mile, que cuenta con 415 habitaciones, en una estructura de franquicia, a partir de mayo de 2025. Bajo este nuevo acuerdo, el hotel mantendrá su marca Sofitel mientras será gestionado por Remington Hospitality según los términos existentes de su Master Hotel Management Agreement con Braemar.
Los empleados actuales recibirán ofertas para mantener sus puestos bajo la subsidiaria de Remington Hospitality. Aunque no se requiere un plan obligatorio de mejora de la propiedad para la conversión, Braemar planea renovar el vestíbulo, el restaurante y el espacio para reuniones del hotel en los próximos dos años.
Según el CEO Richard J. Stockton, la compañía espera un aumento inmediato en el valor de la propiedad debido a la retención de la marca Sofitel y al acuerdo de gestión con Remington, que puede ser rescindido en caso de venta.
브레이머 호텔 & 리조트 (NYSE: BHR)는 415개의 객실을 보유한 소피텔 시카고 매그니피센트 마일을 2025년 5월부터 프랜차이즈 구조로 전환할 계획을 발표했습니다. 이 새로운 계약 하에 호텔은 소피텔 브랜드를 유지하면서 레밍턴 호스피탈리티에 의해 관리됩니다. 이는 브레이머와의 기존 마스터 호텔 관리 계약에 따른 것입니다.
현재 직원들은 레밍턴 호스피탈리티의 자회사 아래에서 그들의 직위를 유지할 수 있는 제안을 받을 것입니다. 전환을 위한 의무적인 자산 개선 계획은 필요하지 않지만, 브레이머는 향후 2년 동안 호텔의 로비, 레스토랑 및 회의 공간을 개조할 계획입니다.
CEO 리차드 J. 스톡턴에 따르면, 회사는 소피텔 브랜드 유지와 레밍턴과의 관리 계약이 판매 시 해지될 수 있기 때문에 자산 가치의 즉각적인 증가를 기대하고 있습니다.
Braemar Hotels & Resorts (NYSE: BHR) a annoncé des plans pour transformer le Sofitel Chicago Magnificent Mile, qui compte 415 chambres, en une structure de franchise, à partir de mai 2025. Dans le cadre de cet accord, l'hôtel conservera sa marque Sofitel tout en étant géré par Remington Hospitality selon les termes existants de son Master Hotel Management Agreement avec Braemar.
Les employés actuels recevront des offres pour maintenir leurs postes sous la filiale de Remington Hospitality. Bien qu'aucun plan d'amélioration obligatoire de la propriété ne soit requis pour la conversion, Braemar prévoit de rénover le hall, le restaurant et les espaces de réunion de l'hôtel au cours des deux prochaines années.
Selon le PDG Richard J. Stockton, l'entreprise s'attend à une augmentation immédiate de la valeur de la propriété grâce à la conservation de la marque Sofitel et à l'accord de gestion avec Remington, qui peut être résilié en cas de vente.
Braemar Hotels & Resorts (NYSE: BHR) hat Pläne angekündigt, das 415-Zimmer Sofitel Chicago Magnificent Mile ab Mai 2025 in eine Franchise-Struktur zu überführen. Im Rahmen dieser neuen Vereinbarung wird das Hotel seine Sofitel-Marke beibehalten, während es von Remington Hospitality gemäß den bestehenden Bedingungen seines Master Hotel Management Agreements mit Braemar verwaltet wird.
Aktuelle Mitarbeiter erhalten Angebote, um ihre Positionen unter der Tochtergesellschaft von Remington Hospitality zu behalten. Obwohl kein verpflichtender Verbesserungsplan für die Umwandlung erforderlich ist, plant Braemar, in den nächsten zwei Jahren die Lobby, das Restaurant und die Tagungsräume des Hotels zu renovieren.
Laut CEO Richard J. Stockton erwartet das Unternehmen aufgrund der Beibehaltung der Sofitel-Marke und des mit Remington bestehenden Managementvertrags, der bei Verkauf kündbar ist, einen sofortigen Anstieg des Immobilienwerts.
- Expected immediate increase in property value
- Retention of valuable Sofitel brand without mandatory improvement costs
- Management agreement with Remington becomes terminable upon sale, providing flexibility
- No required property improvement plan for the conversion
- Significant renovation costs expected over next two years for lobby, restaurant, and meeting space
Insights
Braemar's transition of the Sofitel Chicago to a franchise structure represents a strategic operational enhancement rather than a brand change. This subtle but important distinction allows the property to maintain its luxury positioning within the Accor ecosystem while gaining operational flexibility.
The absence of a required property improvement plan is particularly favorable, as brand-to-franchise conversions often trigger mandatory capital expenditures. This allows Braemar to approach renovations on their own timeline over the next two years, focusing on high-impact areas (lobby, restaurant, meeting space) that drive revenue rather than brand-mandated changes.
The management transfer to Remington Hospitality creates two notable advantages: First, Remington's dedicated focus on the property may enhance operational efficiency compared to brand management, which typically follows standardized approaches across hundreds of properties. Second, the "terminable on sale" management contract provision significantly enhances the property's marketability for potential future transactions by removing a common friction point in hotel acquisitions.
Employee retention offers as part of the transition suggest continuity of service standards, which is critical for maintaining the premium guest experience expected at a Magnificent Mile luxury property. This thoughtful approach to human capital during an operational transition demonstrates sound hospitality management principles.
This franchise conversion creates immediate value for Braemar shareholders through multiple avenues. The CEO's assertion of "immediate uplift in property value" stems primarily from the enhanced flexibility and control while retaining the premium Sofitel brand positioning essential for this luxury-focused REIT.
From a capital allocation perspective, the phased renovation approach without a mandatory PIP (Property Improvement Plan) allows Braemar to optimize their CapEx deployment over two years rather than facing front-loaded expenditures. This preserves near-term capital for potential shareholder returns or other investment opportunities across their portfolio.
The "terminable on sale" provision in the Remington management agreement significantly enhances the property's transaction potential. Hotel assets encumbered by long-term management contracts typically sell at discounts to reflect the difficulty of operational control changes upon acquisition. This structure effectively removes that discount factor.
While specific fee structures aren't disclosed, franchise arrangements typically offer more favorable economics than brand management agreements, with higher retention of property-level cashflows. For a REIT focused on maximizing distributable income, this operational model aligns with shareholder interests while maintaining the brand equity needed in the luxury segment.
"We are pleased to announce the conversion of the Sofitel Chicago Magnificent Mile from being brand-managed to a franchise, and we look forward to working with the Accor team in this new capacity," announced Richard J.
Braemar Hotels & Resorts is a real estate investment trust (REIT) focused on investing in luxury hotels and resorts.
Forward-Looking Statements
Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, among others, statements about the Company's strategy and future plans. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Braemar's control.
These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: our ability to repay, refinance or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; risks associated with our ability to effectuate our dividend policy, including factors such as operating results and the economic outlook influencing our board's decision whether to pay further dividends at levels previously disclosed or to use available cash to pay dividends; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Braemar's filings with the Securities and Exchange Commission.
The forward-looking statements included in this press release are only made as of the date of this press release. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations, or otherwise, except to the extent required by law.
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SOURCE Braemar Hotels & Resorts Inc.
FAQ
When will Sofitel Chicago Magnificent Mile's franchise conversion be completed?
What renovations are planned for Sofitel Chicago Magnificent Mile under BHR's management?
How will the Sofitel Chicago franchise conversion affect current employees?
Who will manage the Sofitel Chicago Magnificent Mile after the franchise conversion?
