Xenia Hotels & Resorts Transitions Fairmont Dallas Successfully
Xenia Hotels & Resorts Celebrates Successful Sale of Fairmont Dallas
Xenia Hotels & Resorts, Inc. (NYSE: XHR) has officially completed the sale of the Fairmont Dallas, a move that is expected to influence the company's portfolio positively. The luxury hotel, featuring 545 rooms, was sold for an impressive $111 million, translating to approximately $203,670 per key. This sale reflects an 8.6x multiple on net operating income, emphasizing the hotel’s value during a transitional period.
Investment Insights and Strategic Decisions
Marcel Verbaas, Chair and Chief Executive Officer of Xenia, expressed satisfaction with the completion of this sale. He noted that the hotel opened its doors in 1969 and that they initially acquired it in 2011 for $69 million. The company achieved an internal rate of return of 11.3% during their ownership period, which is a noteworthy achievement, especially considering the extraordinary challenges faced by the hospitality sector during 2020 and 2021 due to the pandemic.
Impact of Market Conditions
The sale of Fairmont Dallas aligns with Xenia's strategic objective of enhancing the quality of its hotel portfolio. The decision was influenced by the anticipated market impacts from the redevelopment of the Dallas Convention Center and the pressing capital needs of the property. Verbaas highlighted that avoiding substantial additional capital investments was a prudent choice, further validating the sale as being in the company's best interest.
Utilizing Sale Proceeds for Strategic Growth
Proceeds from this transactional success will be allocated towards various corporate needs, including debt repayments and possible acquisitions that align with Xenia's growth strategy. This sale not only optimizes financial positioning but also paves the way for future opportunities that could enhance shareholder value.
About Xenia Hotels & Resorts, Inc.
Xenia Hotels & Resorts, Inc. is recognized as a self-advised and self-administered Real Estate Investment Trust (REIT). The company strategically invests in luxury and upper-upscale hotel and resort properties within the top 25 lodging markets in the United States. Presently, Xenia's portfolio consists of 30 hotels with a total of 8,868 rooms operating across 14 states, featuring renowned hotel brands such as Marriott, Hyatt, Fairmont, and Hilton.
Commitment to Quality and Excellence
The company continues to work closely with revered industry leaders in hotel management to maintain high standards across its properties. This collaboration is part of Xenia's dedicated approach to providing superior hospitality experiences while remaining adaptable in the ever-evolving tourism landscape.
Frequently Asked Questions
What was the sale price of Fairmont Dallas?
The Fairmont Dallas was sold for $111 million, which equates to approximately $203,670 for each room.
What is the significance of this sale for Xenia Hotels?
This sale reflects Xenia's strategic focus on enhancing the overall quality of its hotel portfolio and maintaining strong financial health.
How will the proceeds from the sale be used?
Proceeds will be funneled into corporate purposes that may include debt repayments and potential acquisitions.
What is the internal rate of return on the Fairmont Dallas investment?
During its ownership, the Fairmont Dallas achieved an internal rate of return of 11.3%.
How many hotels does Xenia own and what is their focus?
Xenia owns 30 hotels across 14 states, focusing on luxury and upper-upscale properties in top lodging markets.
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