Plano, Texas Marriott Legacy Commands $104M
- Nov 03, 2017
Ashford Hospitality Prime Inc. has sold the Marriott Plano Legacy Town Center, a 404-key hotel in Plano, Texas, for $104 million.
“The Marriott Plano Legacy is a very well located full service hotel in the heart of one of the fastest growing areas of the Dallas metropolitan area,” Richard Stockton, AHP’s president & CEO, told Commercial Property Executive. “With a renovation of its suites completed and a guest room/public area renovation initiated by the new owner, the hotel will have increased competitiveness in the market.”
According to Stockton, the company’s strategy is to invest in luxury hotels with a RevPAR of at least twice the national average and the RevPAR for this asset was lower than that threshold.
A new strategy
In June, the company agreed to convert its Courtyard Philadelphia Downtown hotel to an Autograph Collection property, and this sale is a step in the execution of the company’s non-core portfolio strategy that it announced early in 2017. The closing of the sale also completed a reverse 1031 exchange that was initiated to acquire the Hotel Yountville in Yountville, Calif.
“Our perspective on the sale was based on a realignment of our portfolio,” Stockton said. “This asset had the lowest RevPAR of our owned hotels and through its sale, we have upgraded the overall quality of our portfolio. Furthermore, due to the ongoing renovation, this property had significant additional capital expenditure needs to remain competitive, which will now be funded by the new owner.”
The Dallas/Plano Marriott at Legacy Town Center is situated in the heart of Plano, Texas, and a short drive away from Dallas and Frisco. The hotel is within walking distance of Legacy Town Center and 23 miles away from DFW Airport.
The Legacy area is booming as new employment floods into Plano and the Dallas metropolitan area more broadly. Major employers such as Toyota, JP Morgan, and State Farm are relocating thousands of employees into new regional headquarters this year and the next, which is expected to significantly drive lodging demand in the market.
According to Stockton, proceeds from the sale primarily will be used for the repayment of debt associated with the property, with any excess applied for general corporate purposes.
“We have several ongoing ROI capital expenditure projects underway this year and next including a conversion of two of our assets to Autograph Collection brands in Philadelphia and San Francisco, as well the renovation and addition of guestrooms at some of our other properties,” he said.
The hotel had an existing allocated debt balance of about $62.3 million that was paid off at closing, along with an additional $22.7 million of debt pay down used to release the asset from its loan pool.
This summer, Ashford Hospitality Prime extended the ground lease at the Hilton La Jolla Torrey Pines, a 394-key hotel in San Diego, by 24 years with a new expiration date in 2067.
Image courtesy of Ashford Hospitality Prime