• Impact of COVID-19 pandemic on previous sales attempts

• Morningstar recognition, $182.3 million cash flow, positive STR data

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Brookfield Asset Management is looking to offload the Atlantis Paradise Island Resort - with a price tag of $2.5bn attached.

The news emerged as Atlantis yesterday touted that it was headed for its best ever year to local media, before Reuters reported that a source revealed: “The Toronto-based asset manager is working with an adviser to solicit potential interest in the property, and could fetch roughly $2.5bn for the luxury resort.”

Reuters continued: “Brookfield took over Atlantis in late 2011 when its previous owner Kerzner International transferred ownership in a debt-for-equity restructuring deal. Brookfield at that time exchanged $175m worth of Kerzner International’s debt in return.”

Calls to Atlantis yesterday for comment were unsuccessful. The report also said that Brookfield also declined to comment.

Brookfield has spent $100m on renovations on Atlantis, and explored selling it in 2019, but the pandemic put a halt to the process.

In February 2020, The Tribune reported that Atlantis would not be sold at that time, with its owner instead launching a three-year investment strategy including room renovations and additional nightlife venues and new restaurants. Recently, the Shake Shack brand opened in Atlantis. 

The news comes a week after Atlantis posted that it has gotten back to pre-pandemic cash flows by generating $182.3m for the year to end-March 2023.

Revenue per available room (RevPAR), a key indicator of hotel industry performance, matched exactly the $200 generated during that pre-COVID period. And, while Atlantis’ occupancy levels were lagging, the analyst’s report pointed out that the 56.2 percent achieved during the 12 months to end-March 2023 was not a like-for-like comparison with the 72.2 percent achieved during the same period for 2018 as the Beach Towers has been closed ever since COVID hit.

Maintaining, or confirming, its existing creditworthiness ratings on the various classes of commercial mortgage-backed securities issued to Atlantis debt holders, ratings agency Morningstar said in a report last month: “The collateral reported a net cash flow of $182.3m for the trailing 12-month period ended March 31, 2023, surpassing the year-end 2022 net cash flow of $133.8m, year-end 2021 net cash flow of $24.4m, and in line with the issuer’s net cash flow of $181.3m.”

That latter figure would have been generated in the pre-COVID era at the time of the last debt refinancing in 2018, which means that Atlantis’ annual cash flow has now rebounded in line with the peaks achieved before the pandemic. The $182.3m achieved for the year to end-March 2023 represents a 36.2 percent year-over-year increase, with the $24.4m generated during the period when the tourism shutdown, including lockdowns and border closures, was at its height.”

Drawing on data provided by STR, the entity that monitors the worldwide lodging industry, Morningstar said of Atlantis: “According to the most recent STR report, the combined occupancy, average daily rate (ADR) and revenue per available room (RevPAR) for the trailing 12-month period ended March 31, 2023, were 56.2 percent, $355 and $200, respectively, up from 35.5 percent, $277 and $99 for year-end 2021.