Chartres Lodging Lines Up $300M CMBS Loan To Refinance Sheraton Dallas
Chartres Lodging Group is close to landing a $300M CMBS loan to refinance debt tied to the 1,841-key Sheraton Dallas Hotel, the largest hotel in Texas.
The new two-year, floating-rate loan was negotiated with Goldman Sachs and J.P. Morgan, the same pair that originated the property’s $270M, two-year loan last year, according to a presale report compiled by Kroll Bond Rating Agency.
Driftwood Capital is expected to provide $35M in mezzanine debt, the KBRA report noted. Last year’s deal included $30M in mezzanine financing from Driftwood.
Chartres Lodging and Elliott Investment Management, which acquired the property in 2017 for more than $224M, are anticipating a trio of 12-month extension options and an interest rate capped at 6%.
A request for comment on the refinancing was not immediately returned by Chartres Lodging officials.
Located at 400 N. Olive St., Sheraton Dallas is the largest hotel by number of keys in Texas. That large size may be working against the hotel, as the presale report notes the property came in last in terms of occupancy when compared to six competitors and second-to-last for average daily rate and revenue per available room.
Occupancy was at 50.1% in 2024, down slightly from 51.1% in 2023 but well ahead of the 23.2% it logged during the height of the pandemic in 2020. Competing hotels had an average occupancy rate above 60%, according to the KBRA report.
The hotel had an average daily rate of $179.45 and RevPAR of $89.71, again below the set of competitors KBRA evaluated.
The report notes that the Dallas hotel market was one of the fastest to recover from the pandemic thanks to strong leisure demand. While that has now stabilized, business travel is expected to contribute to future growth at the property. Sheraton Dallas reported 30% of its bookings are from commercial travelers.
A March 2025 appraisal of the property by LW Hospitality Advisors gave the property an as-is value of $523M and a prospective market value upon stabilization of $584M. Based on that appraisal, the loan-to-value ratio for the new financing is 57.4%.
The hotel started as an office building in 1968 for Southland Life Insurance.
A $210M conversion in the 1990s turned it into the Adam’s Mark Hotel, which opened in 1998.
The hotel flag was changed to Sheraton in 2007, when it received a $90M renovation that saw improvements to hotel rooms, the lobby, meeting rooms and the convention center.
After being acquired by its current owners, the property got another update in 2019, adding a rooftop garden and new eateries. Sheraton Dallas currently offers 230K SF of meeting space and a trio of on-site restaurants.
