Xenia Hotels & Resorts announced that they finalized the sale of the Fairmont Dallas for $111 million.
The Real Estate Investment Trust (REIT), which trades on the New York Stock Exchange under the ticker XHR, said the sale price for the 545-room property netted roughly $203,670 per key.
“We are pleased to have completed the sale of Fairmont Dallas, which opened in 1969 and which we acquired in 2011 for $69 million,” said Marcel Verbaas, chair and chief executive officer of Xenia, in the April 11 press release.
“The unlevered IRR [internal rate of return] during our ownership period is 11.3%, which is an excellent outcome for this investment, particularly given the pandemic’s significant negative impact on cash flows during 2020 and 2021. The disposition reflects our ongoing focus on upgrading the quality of the portfolio, prudent capital allocation, and maintaining balance sheet strength and flexibility.”
Verbaas said the REIT opted to unload the iconic Dallas property partly because of the “significant and disruptive near-term capital needs” it requires. Verbass also pointed to the potential market impacts from the forthcoming redevelopment of the Dallas Convention Center.
As detailed earlier this year in The Dallas Express, the Kay Bailey Hutchinson Convention Center is undergoing extensive renovations. The project’s completion is not expected until 2029. Until then, the area could see significant disruption from ongoing construction work.