BOSTON-LaSalle Hotel Properties announced Friday it has acquired a majority interest in the Liberty Hotel here in a transaction valued at $170 million. The company did the deal through a joint venture with the property’s developer, Carpenter & Co. Inc. LaSalle funded this transaction with proceeds from a sale of common shares on Dec.19th, 2012.
Located in the upscale Beacon Hill district on Charles Street—the area’s main thoroughfare—the 298-room luxury hotel is surrounded by more than 36 million square feet of class A office space and is adjacent and connected to Massachusetts General Hospital, which is considered a premier medical facility. The area also is flooded with shopping, dining and entertainment facilities.
The award-winning hotel, which has a very storied past, sits within a mile of the Boston central business district and within a few miles of Harvard University, Massachusetts Institute of Technology, Northeastern University and Boston University.
Michael Barnello, LaSalle president and CEO, tells GlobeSt.com that the company has an extensive history in Boston, and only sees an upside in continuing to invest in the city.
“We’ve been investing in the market for 15 years. Boston has had a good supply and demand balance for 20 years and we expect that to continue,” he says. “There was no new supply in the market in 2012 and we don’t expect much this year or next as there’s a high barrier to entry for the city.”
Meanwhile, Barnello adds, demand was strong last year and it is expected to grow. “RevPAR for Boston was up for 8.5% for the first 11 months of the year (using metropolitan statistical area data), according to Smith Travel Research, and that’s much higher than U.S overall. Demand across the country, year-to-date, is up 6.8%.”
The Liberty Hotel is part of the Luxury Collection, a brand of Starwood Hotels & Resorts, and is subject to a leasehold interest in the land, which expires in May, 2080. Originally constructed in 1851 as the Charles Street Jail, then redeveloped as a hotel, the Liberty opened in September 2007. The property features 298 guestrooms and 10 suites, 8,415 square feet of meeting space and five food and beverage outlets—many with names honoring the building’s heritage, like CLINK, Alibi and Catwalk, which is situated on an actual catwalk above the lobby where the jail cells once stood.
LaSalle Hotel Properties is a multi-operator REIT that holds 40 hotels and a mezzanine loan secured by two hotels in Santa Monica, CA. The Besthesda, MD-based company focuses on owning, redeveloping and repositioning upscale, full-service hotels located in urban, resort and convention markets. It has strategic relationships with numerous lodging companies.
Carpenter & Co. Inc., headed by Richard L. Friedman, is a privately held Cambridge, MA-based real estate development and investment firm specializing in hotels. Its portfolio is national, stretching from the St. Regis Hotel in San Francisco to the Charles Hotel in its headquarters city.