BOSTON — A joint venture between global asset manager Värde Partners and California-based Hawkins Way Capital has purchased the 1,220-room Sheraton Boston Hotel, located at 39 Dalton St. in the city’s Back Bay neighborhood.
The hotel sold for $233 million, or roughly $191,000 per room, according to multiple local news outlets including The Boston Globe and WCBV. The partnership purchased the 29-story, 1.1 million-square-foot property from Maryland-based REIT Host Hotels & Resorts Inc. (NASDAQ: HST). The luxury hotel offers amenities such as a pool, business center, fitness center, meeting space, spa and wellness center, convenience store and an onsite restaurant.
The Sheraton is Boston’s largest hotel, and the sales price is below that of comparable hotel deals that traded in Boston’s downtown area prior to the pandemic, according to the Globe. Citing data from Pinnacle Advisory Group, the local newspaper puts the downtown Boston hotel market’s average nightly occupancy rate for 2021 at approximately 45 percent.
The deal marks the sixth acquisition between Värde Partners and Hawkins Way Capital as part of a larger plan to acquire $1 billion in value-add and distressed hospitality and housing assets in major U.S. cities. The joint venture’s portfolio also includes the DoubleTree by Hilton Metropolitan in Midtown Manhattan, along with four residential developments in New York and California.
“The pandemic is driving this opportunity among distressed hospitality and select housing assets in gateway markets with high demand for certain alternative hospitality, residential and student housing products,” says Francisco Milone, partner at Värde Partners.
The stock price of Host Hotels and Resorts opened at $17.45 per share on Monday, Feb. 7, up from $14.19 per share a year ago.
— Taylor Williams