Ashford Hospitality Prime has signed a definitive agreement to buy Ritz-Carlton Sarasota in Sarasota, Florida for $171m.

Besides using cash on hand, Ashford plans to draw funds through revolving credit line or securing a non-recourse mortgage loan for the acquisition.

Under the terms of the deal, the seller will provide $5.5m income guaranty in case the hotel’s gross operating profit decreases for up to three years, subject to some conditions.

The firm is also buying a 22-acre vacant land for $9.7m that is being intended for residential development close to the golf course.

The purchase is expected to close in early April after meeting customary closing conditions.

Ashford Prime president and chief executive officer Richard J Stockton said: “The acquisition of the Ritz-Carlton Sarasota is an opportunity for us to acquire a luxury resort property with a premier location in the upscale and growing Sarasota market.” “This property fits perfectly with our strategy of owning luxury hotels and resorts and further diversifies our portfolio while also increasing the overall RevPAR of our portfolio, which is already the highest among our hotel REIT peers.”

Built in 2001, Ritz-Carlton Sarasota has 266 rooms, of which 31 are suites.

The resort provides several amenities, including a beach club, golf club, spa club, eight food and beverage outlets, indoor meeting space, two outdoor pools, fitness club, tennis courts and the kids club.

After closure of the deal, the property will continue to be managed by Ritz-Carlton.