Shubh Takes Hilton Pittsburgh for $28M

Harris Mathis, Shubh's COO, tells GlobeSt.com, this is the company's fourth hotel acquisition. It also owns a Doubletree in Boca Raton, a Marriott in Lincoln, NE, and the Hotel Pontchartrain in Detroit, which Mathis says is being converted to a Sheraton. "We're always looking for major brands in major markets. Pittsburgh is a great location and Hilton is a top national brand." It will continue to operate as a Hilton under a 20-year franchise agreement with the Beverly Hills-based hospitality firm. Shubh has contracted with the Denver-based Richfield Hospitality Management to manage the asset.

A team from the Chicago-based Jones Lang LaSalle Hotels marketed the property on behalf of Hilton and Hertz. The team included Melinda McKay, SVP; Thomas Fisher, EVP, in Chicago, and Dan Adamski, SVP in the local JLL office. McKay tells GlobeSt.com it was a single-asset sale, "part of Hilton's strategy of selling real estate to concentrate on management and franchising." The property drew a lot of interest, she adds.

The hotel, which is Pittsburgh's largest, opened in 1959. The Santa Monica, CA-based Hertz Investment Group acquired the 10 acres on which the Hilton sits in conjunction with its $55-million acquisition of the four Gateway Center office buildings in late 2004. McKay declined to confirm published reports that Hertz obtained a $10-million portion of the selling price, and calls to Hilton and Hertz were not returned by deadline.

The hotel is located at 600 Commonwealth Pl. adjacent Point State Park where the city's three rivers converge and is also near the Fifth & Forbes corridor, which is now undergoing extensive redevelopment. According to McKay, $13 million has been invested in the hotel over the past three years and, of that, $1.5 million was for renovation of its 17,000-sf grand ballroom. Fisher says the hotel's "booking pace has indicated a continued increase in room nights and guest revenue. Adamski says the city's overall hotel market experienced a 6.3% increase in average daily rate in the first quarter of this year and a 3.4% increase in occupancy.