PHILADELPHIA-A partnership has acquired the Divine Lorraine Hotel at 699 N. Broad St. and 3.7 surrounding acres. The partnership includes Sunergy Housing, a Rotterdam, Netherlands-based international developer of student housing, and unidentified US and local investors.

The new owner plans to convert the 10-story, 125,000-sf hotel into student housing units and build entry-level housing on the surrounding land. The price "was north of $10 million," according to Jonathan Stavin, first VP of the local office of CB Richard Ellis. He and Ann Bailey, also a CBRE first VP, marketed the property on behalf of the owner and procured the buyer.

A partnership that included locally based EB Realty Management Corp., the Oaks, PA-based Acorn Development, and Bresler & Reiner of North Bethesda, MD, acquired the vacant hotel in 2003 for an undisclosed price from the New York City-based Goldman Properties. Goldman bought it in 2000 for about $2 million. Following their 2003 acquisition, the three-party partnership acquired the surrounding acres. In April 2005, GlobeSt.com reported that the whole package was put up for sale at an asking price of $12.5 million. Stavin tells GlobeSt.com that Bresler & Reiner since bought out the other partners.

The Victorian hotel was built in 1884 and is listed on the National Register of Historic Places. During the 1930s, it was owned and operated by Father Divine, a charismatic religious leader and self-proclaimed deity. It has been vacant since 2000 when a resident peace movement entity was unable to fund its renovation.

The Broad Street area between City Hall and Temple University is currently being revitalized. Stavin says, "Sunergy was attracted to the property because of the abundance of college students within a five-mile radius. They also recognized that there were dozens of projects catering to the luxury market, but few geared towards the population just out of college or just beginning their careers."

He says the new owner plans a mixed-use project involving restoration of the hotel and construction of several new apartment buildings with ancillary parking and retail. "My understanding is that it will be a phased development project involving the investment of tens of millions of dollars in the Fairmount neighborhood. Development could begin as soon as this fall with completion of the initial phase by fall 2008." A call to a US-based representative of Sunergy was not returned by deadline.