Inland American Ropes in the Fairmont Dallas for $69M
The Fairmont Dallas comes under new ownership as Inland American Lodging Group Inc. acquires the 545-room luxury hotel from Pacific Coast Capital Partners and DiNapoli Capital Partners for $69 million.
“We feel it was a very attractive price, especially for the market and the type of property,” Dan Lombardo, senior investor relations manager, told Commercial Property Executive.
The hotel, carrying the address of 1717 N. Akard St. in Dallas’s bustling Arts District, made its debut in 1969 and last traded hands in 2006. Pacific Coast and DiNapoli did not publicly revealed how much they paid for the property at the time, but Pacific Coast’s records indicate that the company made an equity investment of $20 million.
The two-tower hotel, which also features 70,000 square feet of meeting space, has been well maintained over the years, having undergone approximately $50 million in renovations since 1997. And there are more upgrades ahead, as Inland plans to invest in capital improvements.
Inland made its entrée into the Dallas market last year with the $50 million purchase of the renamed 407-room Dallas Marriott City Center, but the acquisition of the Fairmont gives the company its first luxury property in the city. “We looked at Dallas because of its population growth, economic growth and overall growth throughout the recession,” Lombardo said.
Investor interest in Dallas is on the rise. “It’s the anticipated comeback that is driving the market,” he added. The numbers tell the story. As of the close of the week ending July 30, Dallas ranked third among the top 25 metropolitan markets for the largest year-over-year increase in occupancy, according to a report by hotel research firm STR Global. Hotel occupancy in the city rose 13.5 percent over the one-year period, bringing the current rate to 65.8 percent.
“People are going on vacation and business travel is picking up so investors are saying ‘let’s get into this hotel market,'” Lombardo said.