Fairmont Dallas Sells for $111 Million Amid Renovation Needs

A downtown Dallas landmark hotel is changing hands again.

Xenia Hotels & Resorts sold the Fairmont Dallas for $111 million, exiting a long-held investment that has lagged behind the Florida REIT’s broader portfolio, the Dallas Business Journal reported.

The 545-key property at 1717 North Akard Street was acquired by an undisclosed buyer. The deal works out to $203,700 per key, which marks a 61 percent gain from the REIT’s $69 million purchase in 2011.

The transaction delivers an internal rate of return of 11.3 percent not including debt, according to Xenia, though the company noted that the hotel’s cash flows underperformed and capital needs were mounting.

CEO Marcel Verbaas called the sale an “excellent outcome,” saying the decision helped improve the overall quality of the company’s 30-hotel portfolio. The Fairmont’s revenue per available room and EBITDA trailed its other assets, and upcoming renovations are expected to be “significant and disruptive,” the firm said.

The timing of the deal also reflects broader concerns about downtown Dallas’s hospitality market.

The Fairmont was built in 1969, and the surrounding area has lost ground to Uptown and other trendy urban districts. The upcoming redevelopment of the Kay Bailey Hutchison Convention Center, while potentially revitalizing, is expected to negatively impact nearby hotel demand temporarily, Verbaas told the outlet.

Xenia last updated the Fairmont in 2023, refreshing its exterior and public spaces, but it deferred more invasive upgrades. The Dallas Central Appraisal District most recently valued the property at $78 million, though market-rate hotel sales typically exceed their taxable values.

The Fairmont features marble bathrooms, multiple dining venues and a rooftop pool, and it has ties to the city’s social history, including a bygone Neiman Marcus storefront in the lobby and celebrity performances at the Venetian Room.

In Dallas, the sale comes despite investors’ increasingly turning their attention to ambitious hotel redevelopment and ground-up hospitality projects, particularly in the urban core, where several high-profile repositionings are already underway.

The city’s latest Convention Center redevelopment plan calls for connections to the adjacent Omni Dallas Hotel as well as a potential hotel at the former Dallas Morning News building site being considered for redevelopment.

Hoque Global and PegasusAblon acquired the city’s tallest building, the 72-story Bank of America Plaza at 901 Main Street, from Chicago-based Metropolis Holdings in September with plans for a $350 million redevelopment. They plan to add a 300-key hotel with a 69th-floor reflective pool and major revamp of the surrounding streetscape.

The owners of the historic Belmont Hotel at 901 Fort Worth Avenue, near Trinity Groves, are pursuing landmark status to facilitate its potential redevelopment and, as of last fall, were still in the process of courting investment partners for unspecified entitlement updates.

— Judah Duke