Xenia Hotels & Resorts Acquires The Ritz-Carlton, Denver for Approximately $100 Million

Date: August 2018

Location: Denver, Colorado, USA

Name: The Ritz-Carlton, Denver

No. of Keys: 202, including 47 suites

Seller:

Buyer: Xenia Hotels & Resorts, which is a self-advised and self-administered REIT that invests primarily in premium full service and lifestyle hotels, announced its acquisition of The Ritz-Carlton, Denver, for a purchase price of $100.25 million, . The acquisition was funded with cash available on the Company’s balance sheet.

The purchase price represents an estimated 14.6x multiple on 2018 forecasted Hotel EBITDA. Xenia currently forecasts that the hotel will generate approximately $2.5 million of Hotel EBITDA during the remainder of 2018.

“We are excited to have added a premier luxury hotel in one of our long-term core markets to our portfolio,” said Marcel Verbaas, Chairman and Chief Executive Officer of Xenia.

“As one of the few true luxury offerings in the city, and with guest rooms that are unrivaled from a quality and size perspective, the hotel’s positioning in the market is uniquely differentiated.

With the hotel having received approximately $60,000 per key in capital expenditures over the past few years, The Ritz-Carlton, Denver is positioned particularly well to benefit from the many demand drivers in the downtown Denver market.”

“While Denver has experienced significant lodging supply increases over the past few years, strong demand growth has allowed the market to absorb these supply increases and we view the long-term market fundamentals favourably.

The 14-story luxury hotel features 202 oversized rooms, including 47 suites, as well as 13,000 square feet of meeting space, The Ritz-Carlton Spa, and Elway’s Restaurant.

The hotel recently completed an extensive renovation of its guestrooms, food and beverage outlets, spa, meeting space and lobby. The Ritz-Carlton, Denver is part of a mixed-use development, which also includes 25 luxury residences and 193 apartment units.

In addition to being in excellent physical condition, the hotel has exhibited consistently strong operating results, as illustrated by its RevPAR of $247.86 during the trailing 12 months ending July 31, 2018.

The most notable highlights of the property’s location include its proximity to the 2.2 million square foot Colorado Convention Center, over 36 million square feet of office space within one mile of the property, Coors Field, the University of Colorado Denver and the Denver Performing Arts Center.

The Ritz-Carlton, Denver becomes the 39th hotel in Xenia’s high-quality portfolio of primarily luxury and upper upscale hotels and the Company’s second Ritz-Carlton branded hotel.

The Company owns 39 hotels, including 37 wholly owned hotels, comprising 11,054 rooms, across 17 states and the District of Columbia.

Xenia’s hotels are primarily in the luxury and upper upscale segments, and operated and/or licensed by industry leaders such as Marriott®, Hyatt®, Kimpton®, Fairmont®, Hilton®, and Loews®, as well as leading independent management companies including Sage Hospitality, The Kessler Collection, Urgo Hotels & Resorts, and Davidson Hotels & Resorts.

Price: US$100.25m

Price per Key: US$496,000

THPT Comment: Great move for Xenia…and not a bad price

First Seen: Markets Insider