Xenia Sells 5-Hotel Portfolio for $163M
- Jun 06, 2017
An affiliate of Summit Hotel Properties Inc., of Austin, Texas, has agreed to purchase from Xenia Hotels & Resorts, of Orlando, Fla., an 812-guestroom, five-hotel portfolio, for a total price of $163 million, both parties announced Monday. The deal follows other very recent, separate acquisitions by each company.
The hotels are the 203-key Courtyard Fort Worth Downtown/Blackstone, the 123-key Courtyard Kansas City Country Club Plaza, the 182-key Courtyard Pittsburgh Downtown, the 116-key Hampton Inn & Suites Baltimore Inner Harbor and the 188-key Residence Inn Baltimore Downtown/Inner Harbor.
The purchase price represents about $201,000 per guestroom and an 11.1x multiple on the hotels’ combined trailing 12-month EBITDA as of April 2017. The portfolio achieved an average RevPAR of $115.52 over that period.
“[W]e strongly believe this to be a mutually beneficial strategic transaction,” Marcel Verbaas, president & CEO of Xenia, said in a prepared statement. “While these hotels fit well within Summit’s portfolio of quality, upscale hotels, the completion of this transaction and our recent acquisition of the Hyatt Regency Grand Cypress represent a further refinement of our portfolio, consistent with our strategic focus on primarily owning luxury and upper upscale assets in top 25 lodging markets and key leisure destinations.”
“The completion of this transaction will represent the continued execution of our strategy of acquiring premium-branded upscale hotels with efficient operating models while maintaining a geographically diversified portfolio,” Summit Chairman, President & CEO Daniel Hansen added. “All five of these hotels are located in prime locations in strong markets and exhibit many of the upside characteristics that are important to our investment criteria.”
Closing is expected within the next 30 days.
In conjunction with the transaction, Summit will be executing new franchise agreements with the hotels’ respective franchisors and expects to spend about $13 million to $16 million in capital improvements required under these agreements over the next two years.
As reported last week by Commercial Property Executive, the Hyatt Regency Grand Cypress in Orlando was purchased by Xenia for $205.5 million, or about $252,000 per key. The 815-key property features more than 65,000 square feet of indoor and outdoor meeting and event space, six food and beverage outlets, and a full-service spa.
And on Monday, we reported on Summit’s acquisition of the Courtyard by Marriott Fort Lauderdale for $85 million.