Xenia Hotels & Resorts has sold its 221-room Residence Inn Boston Cambridge hotel in Cambridge, Massachusetts for $107.5 million. This transaction marks the sale of the only remaining select service asset in the company’s portfolio.
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The sale price represents an 11.6x multiple and a 7.8% capitalization rate on the hotel’s 2019 EBITDA and net operating income, respectively. Xenia (XHR) disclosed that the buyer assumed the $60.3 million mortgage that was collateralized by the hotel.
The company will use the $46 million net proceeds from the deal to repay borrowings under its credit facilities and for other corporate purposes. (See XHR stock analysis on TipRanks)
Marcel Verbaas, Xenia’s Chairman and CEO stated, “This transaction, which exemplifies our focus on value creation for our shareholders and our continued dedication to our long-term strategy, has created additional balance sheet flexibility during this unprecedented time.”
The company also disclosed that the previously announced sale of Marriott Napa Valley Hotel & Spa is expected to close before the end of October.
On Aug. 3, B.Riley Financial analyst Bryan Maher reiterated a Buy rating on the stock with a price target of $10. However, currently, the Street has a more cautious Hold consensus for XHR based on 1 Buy, 2 holds and 1 Sell.
With shares down about 58% year-to-date, the average analyst price target of $8.67 indicates a possible downside of 4.4% in the coming months.
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