Ryman Hospitality Properties Inc. has reached an agreement with Stratus Properties Inc. to acquire Block 21, a mixed-use entertainment, lodging, office and retail complex located in the heart of downtown Austin, Texas, for $275 million, which includes the assumption of approximately $141 million of existing mortgage debt.
Completed in 2010 and located on an entire city block in Austin’s 2nd Street District, Block 21 is home to the iconic ACL Live at the Moody Theater (ACL Live), a 2,750-seat state-of-the-art entertainment venue that serves as the filming location for the famed Austin City Limits television series. The Block 21 complex also includes the 251-room W Austin Hotel, the 350-seat 3TEN at ACL Live club and approximately 53,000 square feet of other Class A commercial space.
Colin Reed, Chairman and Chief Executive Officer of Ryman Hospitality Properties, said, “Block 21 is a one-of-a-kind asset anchored by a world-class theater in one of the most vibrant and culturally significant music destinations in the country. We believe ACL Live, along with the entire Block 21 complex, is a natural complement to our portfolio of iconic entertainment and media assets. Through this acquisition, we have the opportunity to build a relationship with the millions of music lovers who visit Austin each year that will allow us to cross-promote our brands to a new, but related customer. We also believe there are significant opportunities to create content that will position Austin and Block 21 as a must-visit destination for country lifestyle consumers through our new TV platform, Circle, which is set to launch in early 2020.”
William H. Armstrong III, Chairman of the Board, President and Chief Executive Officer of Stratus, said, “Ryman Hospitality Properties is a great company that understands and respects the strong connection that exists between Austin and its music scene. We think Ryman Hospitality Properties’ expertise in both hospitality and live entertainment, plus their demonstrated stewardship of the iconic Ryman Auditorium and Grand Ole Opry makes them the ideal company to usher Block 21 and ACL Live into their next decade.”
Commonly referred to as the live music capital of the world, Austin welcomes more than 27 million visitors a year who travel to the market to experience its festivals, unique music venues, culinary scene, and nightlife. Austin has also enjoyed strong transient hotel demand and robust population growth over the past decade. Large corporate relocations and expansions within the market have led to low office and retail space vacancies, particularly in the downtown districts.
Reed continued, “The Stratus Properties team has done a remarkable job supporting their vision for Block 21 with high-quality brands and relationships, like Marriott and Austin City Limits. We look forward to building upon the tremendous momentum they have created with Block 21 and to continuing the close relationship between Austin City Limits and ACL Live at the Moody Theater for many years to come. With our team’s expertise in hospitality, media and entertainment, we believe we are in a unique position to, over time, cement the entire Block 21 complex as a music-centric entertainment and lodging hub with ACL Live at its center.”
The acquisition is expected to close in the first quarter of 2020, subject to customary closing conditions including, but not limited to, consent to the Company’s assumption of the existing mortgage loan by the loan servicer and the consent of the property manager, an affiliate of Marriott, to the Company’s assignment and assumption of the existing management agreement.