Xenia Buys Arlington Hotel for $105M

By Tudor Scolca

The Ritz-Carlton Pentagon City Hotel

Xenia Hotels & Resorts acquired The Ritz-Carlton Pentagon City, a luxury hotel in Arlington, Va. The company funded the acquisition with cash available on its balance sheet and its senior unsecured credit facility. The purchase price was $105 million, or approximately $287,670 per key.

Xenia estimates the acquisition price to be an 11.3x multiple of 2017’s forecast of hotel EBITDA and expects to generate around $2 million EBITDA for the remainder of this year. Recently, the hospitality company sold a portfolio of five luxury hotels, across four different cities, obtaining $163 million for the properties. 

Key location 

“The hotel’s excellent location and exposure to a diverse set of demand generators in the Arlington and Washington D.C. markets, its strong in-place cash flow, and our ability to acquire the hotel at an attractive valuation were key considerations in our decision to acquire this outstanding asset,” said Marcel Verbaas, president & chief executive officer of Xenia, in a prepared statement. 

The 365-key hotel is located at 1250 S. Hayes St., near multiple shopping malls, high-end retailers, museums, restaurants and the Pentagon, as well as the Crystal City and Rosslyn business districts. Ronald Reagan Washington National Airport is a 10-minute drive from the hotel, and downtown Washington, D.C. can be reached in 15 minutes. The building recently underwent an $11 million renovation of its guestrooms and club lounge. The Ritz-Carlton, Pentagon City boasts guestroom amenities such as feather beds with 400 thread-count linens, in-room gourmet coffee and tea and 24-hour in-room dining. The property also features a full-service business center, valet parking, fitness center with indoor pool, sauna and steam facilities, as well as indoor access to the Metro.

Image courtesy of Xenia Hotels & Resorts