Fairmont hotel hits market, valued at $600M

Third-tallest building in Austin poised to smash city record for most expensive hotel sale

Manchester Financial's Ted Eldredge with Fairmont Austin
Manchester Financial's Ted Eldredge with Fairmont Austin (Manchester Financial Group, Google Maps, Getty)

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.

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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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