HEI Hotels Buys, Converts Two Hotels

"We were the brand's first new US franchisee, and based on our positive experience with the converted San Francisco Le Méridien, we remain very confident about the long-term potential of Le Méridien," says Steve Mendell, HEI's EVP of acquisitions and development. "With so few properties in the US, we see many opportunities to acquire and convert additional hotels and build brand equity with virtually no impact issues. The upper upscale segment has experienced consistent demand growth over the last few years, which is another major plus for the brand."

Although the firm has not to date released any financial information concerning its purchase of the Hotel@MIT, reports are the deal is valued at approximately $60 million. The property at 20 Sidney St. is adjacent to the Massachusetts Institute of Technology campus. HEI Hotels will be purchasing the hotel from a joint venture between Forest City and MIT as previously reported on GlobeSt.com. The hotel is situated at University Park at MIT, an office, high-tech and biomedical complex. The hotel also features 7,700 sf of state-of-the-art meeting space, a full-service restaurant, a terrace garden for outdoor functions and a fitness center.

Construction on the Philadelphia hotel property located at 1421 Arch St. is scheduled to begin by year's end. Arch Street Hotel Partners owns the currently vacant landmark YMCA building, which Development Services Group Inc. will convert to a 202-room, upscale, full-service Le Méridien hotel.

"This is a classic boutique hotel in a dynamic urban setting that is well suited for the Le Méridien brand," Mendell says. "Downtown Philadelphia is in a strong growth phase, which includes a robust hotel market that has experienced double-digit RevPAR gains over the past three calendar years."

When completed, the Le Méridien lobby will be located on the ground level, with guest rooms on floors five through 10 of the 10-story building. The hotel will feature 5,330 sf of meeting space, including a 2,900-sf ballroom. The hotel also will house a cocktail/wine bar and small gourmet restaurant, concierge service and a state-of-the-art fitness center. HEI Hospitality did not release any financial details on the price it intends to pay for the property.