Xenia
Hotels & Resorts CEO said the Dallas property has “significant and
disruptive near-term capital needs.”
DALLAS —
Orlando, Florida-based REIT Xenia Hotels & Resorts has completed the sale
of the 545-key Fairmont Dallas to an undisclosed buyer for $111 million, or
approximately $203,670 per key.
Xenia CEO
Marcel Verbaas said the property had “significant and disruptive near-term
capital needs” as well as the expected impact on the market from the upcoming
redevelopment of the Dallas Convention Center.
“We believe
that this sale and the avoidance of the significant additional capital
investment is a superior outcome for the company relative to continued
ownership and re-investment,” Vernaas said. “Additionally, the transaction has
increased the overall quality of our portfolio, as Fairmont Dallas’ historical
RevPAR and EBITDA/key trailed meaningfully below our portfolio averages.”
The
transaction price represents an 8.6x multiple and a 10% capitalization rate on
the property’s hotel EBITDA and net operating income for the 12 months ended
February 28. The transaction price metrics are exclusive of an estimated $80
million of near-term capital expenditures.
The company
expected Fairmont Dallas would have earned approximately $8 million of hotel
EBITDA for the remainder of 2025. The hotel opened in 1969 and Xenia acquired
it in 2011 for $69 million.
Xenia owns
30 luxury and upper upscale hotels with 8,868 rooms across 14 states.