Hyatt Regency Orange County Sells for $137M

The 656-key Hyatt Regency Orange County hotel in Garden Grove, Calif. has changed ownership.

Xenia Hotels & Resorts Inc. has announced the $137 million disposition of the Hyatt Regency Orange County, a 656-key hotel located in Garden Grove, Calif. The identity of the buyer was not disclosed.

Hyatt Regency Orange County

Hyatt Regency Orange County

The sale price represents an 11.8x multiple on the hotel’s 2015 forecast EBITDA and a 7.1 percent capitalization rate on the 2015 forecast NOI. Additionally, Xenia Hotels has retained the approximately $5.9 million balance in the hotel’s capital expenditure reserve account.

During the first half of 2015, the Hyatt Regency Orange County achieved RevPAR of $115.92, approximately 19 percent below the company’s portfolio RevPAR of $142.44 during that same period.

“This transaction allowed us to take advantage of the private market valuation for a legacy hotel in our portfolio that we expected to deliver below-average growth as additional supply is entering this competitive and relatively low-rated market. Given the market’s dynamics and the hotel’s position, we concluded that near-term capital requirements would not represent a prudent additional investment for the Company,” Marcel Verbaas, president & CEO of Xenia Hotels & Resorts, said in prepared remarks.

Eastdil Secured represented Xenia Hotels & Resorts on the transaction.

Following the property’s sale, the company estimates that its 2015 Adjusted EBITDA will be reduced by approximately $1.9 million. Excess proceeds from the disposition after repayment of the hotel’s $62 million mortgage loan will be utilized to pay off the $73 million mortgage loan the company secured for the Marriott Woodlands Waterway Hotel & Convention Center in Texas.

Image courtesy of Hyatt Regency Orange County