Sheraton Dallas Hotel Lands $335 Million Refinancing

26 June 2025

A California firm locked in $335 million to refinance Texas’ largest hotel, despite the market’s dwindling occupancy and stiff competition.

San Francisco–based Chartres Lodging Group secured the refinancing package for the 1,841-key Sheraton Dallas Hotel in downtown Dallas, connectCRE reported. The financing, which amounts to $182,000 per key, replaced a $270 million loan that originated just last year.

The deal includes a $300 million senior loan from Goldman Sachs and JPMorgan Chase, along with a $35 million mezzanine loan from Driftwood Capital, which increased its original $30 million commitment. The package extended maturity with a two-year term and three one-year extension options.

The convention hotel, at 400 North Olive Street, is still recovering from pandemic-era performance lows.

Chartres and co-owner Elliott Investment Management, based in New York City, acquired the property in 2017 for more than $224 million (under $122,000 per key). They refinanced it in April 2024 with a two-year CMBS loan via Goldman and JPMorgan, a short-term deal now replaced. The new loan has a capped interest rate and a loan-to-value ratio below 60 percent based on a March appraisal of $523 million by LW Hospitality Advisors, sources told Bisnow in April.

Driftwood’s mezzanine financing came through its lending arm, Driftwood Lending Partners, and is positioned behind the senior debt. The 1968-built hotel has more than 230,000 square feet of meeting and event space, with 113 meeting rooms, three restaurants and 1,100 parking spots.

Recent renovations, including a $90 million refresh in 2019, have done little to help the property match peer performance. Occupancy hovered at 50.1 percent last year, below the 60 percent average among competitors, according to KBRA data, cited by Bisnow. Revenue per available room was also near the bottom of its comp set, though up significantly from pandemic-era lows.

The Sheraton deal could be a reflection of renewed lender faith in the city’s hospitality market as business travel rebounds and event bookings climb.

The city of Dallas is seeking its own $1 billion bridge loan from JPMorgan for the massive redevelopment of the Kay Bailey Hutchison Convention Center on the other side of downtown, which will likely see other competitor flagship hotels like the Omni Dallas Hotel reap the benefits ahead of the nine World Cup matches to be held at the AT&T stadium in Arlington in 2026.

Dallas, where more hotel projects are underway than in any other U.S. metro, has seen its share of high-dollar hotel debt deals in the post-pandemic era. Crescent Real Estate landed a $300 million CMBS refi in 2023 for the Ritz-Carlton and Hotel Crescent Court in Uptown.

— Judah Duke