US: Xenia Hotels & Resorts has reportedly sued SBG US Holdings for backing out of an agreement to buy its portfolio of seven Kimpton-managed hotels.
In March 2020, Xenia announced an agreement to sell its portfolio comprising 1,124 guest rooms for $483 million, inclusive of $6 million of cash in existing FF&E reserve accounts, according to Hotel News Resource.
The hotels include: Canary Hotel Santa Barbara, Hotel Monaco Chicago, Hotel Monaco Denver, Hotel Monaco Salt Lake City, Hotel Palomar Philadelphia, Lorien Hotel & Spa in Alexandria, Virginia, and RiverPlace Hotel in Portland, Oregon.
In June 2020, Xenia has sued the Singaporean-based private company, SBG US Holdings, for backing out of the transaction amid the coronavirus crisis. Xenia claims SBG owes $20 million USD.
The Hotel Property Team revealed that the March 2020 sale was set to be a joint venture comprising King & Phillip Investments Pte Ltd, iProsperity Pty Ltd, and SoilBuild Group Holdings Ltd. There is confusion as to why the lawsuit has been filed against SBG.
Speaking at the time of sale, Marcel Verbaas, chairman and CEO of Xenia, said: “We are pleased to have reached an agreement to sell this portfolio at attractive pricing, both generally and relative to our current trading multiple. If completed as anticipated, this sale will represent our largest transaction since our listing in early 2015. While these hotels are high-quality assets that are largely consistent with our long-term investment strategy, we believe that this disposition is an illustration of our ability to opportunistically unlock value within our current portfolio and increase shareholder value through portfolio recycling. The sale of these assets at an appealing valuation will further strengthen our balance sheet and position the company to drive enhanced growth in the years ahead.”