Orlando, FL-based Xenia Hotels & Resorts Inc. has acquired Fairmont Pittsburgh, a 185-room luxury hotel located in Pittsburgh, PA. The purchase price was $30 million, or approximately $162,000 per key.
The acquisition was funded with cash available on the company’s balance sheet. The purchase price represents an estimated 11.0x multiple on 2018 forecasted Hotel EBITDA.
Xenia currently forecasts that the hotel will generate approximately $0.9 million of Hotel EBITDA during the remainder of 2018, according to a prepared statement.
“We are excited to acquire Fairmont Pittsburgh, the leading luxury hotel and RevPAR market leader in Pittsburgh, a market that has become one of the most dynamic regional economies in the country,” said Marcel Verbaas, Chairman and Chief Executive Officer of Xenia. “The acquisition of this unique asset, at a price per key significantly below replacement cost and an attractive EBITDA multiple, will contribute to the ongoing enhancement of the quality of our portfolio and further diversify our portfolio location and asset mix.”
He adds that “While the hotel is in good physical condition, we believe we will be able to drive earnings growth as we integrate the hotel into our platform and further enhance the property’s position as the premier luxury hotel in the market.”
Fairmont Pittsburgh features 185 spacious rooms, 12,000 square feet of meeting space, a 6,000 square foot health club and spa, and a newly renovated bar and restaurant, “fl. 2”. Built in 2010, the LEED Gold Certified Property has consistently been ranked as the best hotel in Pittsburgh by US News and World Report.
The hotel is strategically located in the center of Downtown Pittsburgh, in close proximity to five Fortune 500 company headquarters, 23 million square feet of Class A office space, three venues home to Pittsburgh’s professional football, baseball, and hockey teams, and internationally renowned museums and theaters. The hotel is part of Three PNC Plaza, a mixed-use building which contains four separate and complimentary uses, including a 330-space below-ground parking garage, a 305,000 square foot office component, 28 residential condominiums, and Fairmont Pittsburgh.
The hotel’s strong operating performance will be accretive to the overall Xenia portfolio, with RevPAR of $194.72 during the trailing 12 months ending July 31, 2018. Fairmont Pittsburgh becomes the 40th hotel in Xenia’s high-quality portfolio of luxury and upper upscale hotels and the Company’s second Fairmont hotel.