Fairmont hotel hits market, valued at $600M

A luxury hotel in downtown Austin is hitting the market, and it could smash the record for most expensive hotel transaction even if it sells for a price well below its valuation.

A joint venture between Manchester Financial Group and Colony Capital has hired Eastdil Secured to market the 37-story, 1,048-room Fairmont Austin at 101 Red River Street, Real Estate Alert reported. 

The hotel is valued at just over $600 million, and bids are expected to start at around $575,000 per room, which would equate to a $602 million sale. If it sells for even half that amount, it would break the record for priciest hotel transaction ever in Austin, set in 2021 when Host Hotels & Resorts sold the 319-room Hotel Van Zandt for $246 million, the outlet reported. That’s about $771,000 per room.

Manchester and Colony developed the Fairmont in 2018 and refinanced its construction loan with a $425 million debt package a year later. The debt package comprises a $300 million senior mortgage and two mezzanine loans totaling $125 million, the outlet said. The loan is set to mature in September, though one single-year extension option remains.

While most hotels across the country struggle to return to pre-pandemic levels, the Fairmont is performing strong, as it generates more than two-and-a-half times the income needed to cover its debt. Among convention center hotels, the Fairmont’s average revenue per room ranks third in Texas.

Designed by architecture firm Gensler, the glass-clad hotel is the third-tallest building in Austin. It has LED color-changing lighting along the crown and is topped by a 139-foot spire. The hotel features 129,000 square feet of meeting space, plus high-end restaurants and bars, a spa and a rooftop pool.

—Quinn Donoghue 

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