Xenia Hotels & Resorts, Inc. today announced its acquisition of Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch, a 493-room upper upscale resort located in Scottsdale, Arizona, and Royal Palms Resort & Spa, a 119-room luxury resort located in Phoenix, Arizona that is part of The Unbound Collection by Hyatt. The Company acquired the two hotels from affiliates of Hyatt Hotels Corporation for a combined purchase price of $305 million, or approximately $498,350 per key.ÊÊ
The purchase price represents an estimated 12.6x multiple on 2017 forecasted Hotel EBITDA. The Company currently forecasts that the hotels will generate approximately $6 million of Hotel EBITDA for the remainder of 2017.
“The acquisition of Hyatt Regency Scottsdale and Royal Palms demonstrates our continued effort to invest in high-quality, uniquely positioned, premium full service and lifestyle hotels in top lodging markets,” stated Marcel Verbaas, President and Chief Executive Officer of Xenia
Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch features 493-rooms, 70,000 square feet of meeting space and impressive amenities including a 2.5-acre resort pool, eight food and beverage outlets, four tennis courts, Spa Avania, and access to 27-holes of golf.
Royal Palms Resort & Spa, located along the Camelback corridor, is a luxury resort that is part of The Unbound Collection by Hyatt.Ê The property is an iconic historic hotel in the Phoenix area with 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 Scottsdale/Paradise Valley market is the top performing tract in the Greater Phoenix region due to its national and international recognition as a premier meeting and resort destination.
Both hotels will continue to be managed by Hyatt.Ê Following this transaction, Hyatt manages eight hotels for Xenia.
“We are excited to have found additional opportunities to expand our relationship with Hyatt, including our first acquisition affiliated with The Unbound Collection by Hyatt,” continued Mr. Verbaas.Ê “The Unbound Collection by Hyatt fits well into our overall strategy of owning unique, experience-driven lifestyle hotels and we look forward to blending this brand into our portfolio ofÊhotels.”
The acquisition was funded with a combination of cash available on the Company’s balance sheet, a new $100 million mortgage loan, and a new $125 million senior unsecured term loan.Ê ÊThe new mortgage loan is collateralized by the Renaissance Atlanta Waverly Hotel & Convention Center, matures in August 2024, and bears an interest rate of LIBOR plus 210 basis points.
The new term loan matures in September 2024 and bears an interest rate based on a pricing grid with a range of 170 to 255 basis points plus LIBOR, determined by the Company’s leverage ratio.Ê Based on the Company’s pro forma leverage ratio, the current effective interest rate is LIBOR plus 170 basis points.Ê The term loan also includes an accordion option that allows the Company to request additional lender commitments up to a total of $125 million.
