DALLAS-The $50 million sale of the 407-unit Westin City Centeris proof that investors are increasingly confident about the futureperformance of upscale luxury hotels located here, according toBert Stevens, a first vice president with CBRE’s Hotel Partnersdivision.

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“This is one of the largest transactions in Dallas in the pastthree years,” Stevens tells GlobeSt. “It signifies an improvingmarket. Dallas has been one of the top two markets in the nation interms of revenue gains in the last two quarters. During the secondquarter, Dallas had revenue gain of 7.3% with higher priced hotelleading the gain.”

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Stevens expects the sector to show even more improvement sincesupply has dwindled substantially. “On the construction side, theonly property that is similar is the convention center hotel,” henotes.

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Inland American Real Estate Trust Inc. acquired the Westin CityCenter from Chicago-based LaSalle Hotel Properties, paying roughly$122,000 per room. “That number is below replacement cost, but it’sin line with what other properties are trading for across thenation,” Stevens says.

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Stevens notes Dallas hotel properties have not traded at premiumpricing historically. “The Dallas market has been fairly stable,with no real lows or highs, and pricing is based off thatstability,” he explains.

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Stevens contends the Westin City Center trade indicates thatinvestment sales activity in the hospitality sector is ramping up,both locally and nationally. Activity in Dallas over the past sixmonths has been slow: according to Real Capital Analytics, onlyfour hotel properties have traded (above $5 million) for a total of$84 million.

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As part of Oak Brook, IL-based Inland American’s portfolio, theWestin City Center has been reflagged as a Marriott property andrenamed Dallas Marriott City Center. Located on the edge of thenation's largest urban arts district at 650 North Pearl St.,theAAA-4-Diamond hotel is connected to the Plaza of the Americas, amixed-use project including office and retail space, as well as anice skating rink.

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The hotel, which had been a Westin property since 2003, willundergo an extensive renovation over the next year, including acomplete remodeling of the guest rooms, the addition of a conciergelounge, creation of a state-of-the-art fitness facility overlookingdowntown Dallas and extensive upgrades to the restaurant and lobbyarea.

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