ORLANDO, FL—Xenia Hotels & Resorts Inc. has acquired two Hyatt Hotel properties in Phoenix and Scottsdale, AZ and the Ritz-Carlton Pentagon City in Arlington, VA in two separate transactions for a total purchase price of $410 million.
Xenia announced on Wednesday that it purchased the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch, a 493-room upper upscale resort located in Scottsdale and the Royal Palms Resort & Spa, a 119-room luxury resort located in Phoenix for $305 million or approximately $498,350 per key. Both properties were acquired from Hyatt Hotels Corp. and were part of the part of The Unbound Collection by Hyatt. The purchase price represents an estimated 12.6x multiple on 2017 forecasted Hotel EBITDA. Xenia currently forecasts the hotels will generate approximately $6 million of hotel EBITDA for the remainder of 2017.
Xenia also reported on Wednesday it had purchased The Ritz-Carlton Pentagon City, a 365-room luxury hotel in Arlington for $105 million, or approximately $287,670 per key. Xenia did not divulge the seller of the hotel. In 2004, MeriStar Hospitality Corp acquired The Ritz Carlton Pentagon City for $93 million. In February 2006, MeriStar Hospitality was acquired by an affiliate of the Blackstone Group for approximately $2.6 billion.
The Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch features 493-rooms, 70,000 square feet of meeting space and amenities that include a 2.5-acre resort pool, eight food and beverage outlets, four tennis courts, Spa Avania and access to 27-holes of golf.
The Royal Palms Resort & Spa is located along the Camelback corridor and boasts 119-rooms, 20,000 square feet of meeting space, T. Cook's, an award-winning Mediterranean restaurant, The Mix Up Bar, and the Alvadora Spa.
The 18-story The Ritz Carlton Pentagon City hotel features 365 rooms and 19,000 square feet of meeting space, and has recently completed an $11-million renovation of its guest rooms and club lounge.
In terms of the company's Arizona hotel purchases, Marcel Verbaas, president and CEO of Xenia, says, “While the hotels are in good physical condition and have strong in-place cash flows, we believe we will be able to drive further growth as we work with Hyatt to continue to optimize operations, reap the benefits of the recent branding of Royal Palms and make targeted capital improvements to further upgrade both properties.”
He adds that the Scottsdale and Phoenix markets boast relatively low supply growth over the next several years and the two hotels, each positions the firm to take advantage of all the unique demand drivers of the Scottsdale area.
Verbaas says of the firm's addition of the Ritz-Carlton property in Arlington, VA, “The hotel's excellent location and exposure to a diverse set of demand generators in the Arlington and Washington, DC markets, its strong in-place cash flow, and our ability to acquire the hotel at an attractive valuation were key considerations in our decision to acquire this outstanding asset. We look forward to expanding our long-standing relationship with Marriott and building on the existing operations at the property as we benefit from the hotel's recent rooms renovation and the long-term strength and stability of the DC market.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
