Xenia Hotels & Resorts has executed an agreement to sell a seven-hotel portfolio for $483 million, inclusive of $6 million of cash in existing furniture, fixtures and equipment reserve accounts, to an undisclosed buyer. The closing, subject to the satisfaction of certain customary closing conditions, is expected to occur in early May.
The portfolio consists of seven Kimpton-managed hotels: the Kimpton Canary Hotel in Santa Barbara, Calif; the Kimpton Hotel Monaco Chicago; the Kimpton Hotel Monaco Denver; the Kimpton Hotel Monaco Salt Lake City; the Kimpton Hotel Palomar Philadelphia; the Kimpton Lorien Hotel & Spa in Alexandria, Va.; and the Kimpton RiverPlace Hotel in Portland, Ore.
The agreed-upon sale price represents a 16.1 multiple and a 5.3 percent capitalization rate on the hotels' combined 2019 hotel earnings before interest, taxes, depreciation and amortization and net operating income, respectively. The company expects net proceeds from the sale to be approximately $420 million, after repayment of a mortgage loan encumbering one of the hotels and transaction costs. Though the closing is expected in early May, the buyer can extend the date to early June with the payment of an additional deposit.
"If completed as anticipated, this sale will represent our largest transaction since our listing in early 2015,” Marcel Verbaas, chairman/CEO of Xenia, said in a statement. “While these hotels are high-quality assets that are largely consistent with our long-term investment strategy, we believe that this disposition is an illustration of our ability to opportunistically unlock value within our current portfolio and increase shareholder value through portfolio recycling. The sale of these assets at an appealing valuation will further strengthen our balance sheet and position the company to drive enhanced growth in the years ahead."
Xenia owns 39 hotels with 11,245 guestrooms across 16 states.