Brown Palace Owner Crescent Real Estate Buys Hotel Monaco
Denver’s 189-room Kimpton Hotel Monaco sold for a loss to Fort Worth, Texas-based Crescent Real Estate, which also owns the Brown Palace.
Orlando-based REIT Xenia Hotels & Resorts Inc. announced on Thursday it had sold the asset — which it first signaled it would sell in March 2020, along with six other hotels — to Crescent for $69.75M. That is down from the $75M Xenia paid in 2013, about a 9% loss.
Xenia also noted the property sale and its $69.75M price point in a Q3 filing to the Securities and Exchange Commission, which differs from a deed filed with the Denver County Clerk and Recorder noting a $50.8M sale price.
However, hotel sales often include equipment, fixtures and furniture that are not reflected in real estate sale records. Additionally, sales of ground-floor retail spaces like the one the Hotel Monaco sits atop are sometimes recorded separately.
Neither Xenia nor Crescent responded to queries from Bisnow by press time.
Crescent purchased Denver's best-known hotel, the Brown Palace, and an adjacent Holiday Inn Express, in 2018 for $125M.
Hotel Monaco's slumping sales price is another data point showing how downtown Denver fortunes changed during the pandemic. When Inland America Real Estate Trust, which spun off its hospitality arm into Xenia in 2015, purchased the Hotel Monaco in 2013, it represented a high-water mark for hotels statewide. The sales price amounted to about $397K per key, the highest figure statewide for a period of several years, according to a 2015 analysis by the hospitality-oriented consulting firm HVS.
Denver’s high-end hotels went on a tear in the years that followed, with regional per-door sales records rising steadily. In 2015, when the 403-room Embassy Suites by Hilton Denver Downtown-Convention Center sold for $170M, its $422K per-room average was a new high for the city.
By the time the pandemic struck, that record had been smashed several times over — including in Xenia’s August 2018 purchase of downtown Denver’s Ritz-Carlton for $100.25M, or about $496K per key. In March 2019, the sale of Cherry Creek’s 154-room Halcyon Hotel set yet another new record with its high of nearly $604K per room.
At $69.75M, the latest purchase of the Hotel Monaco works out to $363K per key, well below records set in recent years. Xenia also sold the 228-room Residence Inn Denver City Center for $404K per key in December 2018. Still, Xenia insists that it remains optimistic about the future of Denver’s hospitality industry.
“We remain bullish on the Denver market, as evidenced by our continued ownership of and capital investments into The Ritz-Carlton, Denver,” said Marcel Verbaas, Xenia’s Chairman and CEO, in the company’s Q3 8-K filing with the SEC. “The sale of Kimpton Hotel Monaco Denver will also enhance our ability to pursue future investment opportunities in the Denver market that could be better long-term strategic fits for the Company.”