Hotel Commonwealth To Trade for $136M

BOSTON—The Hotel Commonwealth, which is currently undergoing a major expansion, will change hands early next year. Orlando, FL-based Xenia Hotels & Resorts, Inc. reports it has reached an agreement to acquire the hotel in Kenmore Square for $136 million.

The luxury, independent, boutique hotel that is located near Fenway Park and Boston University, is currently undergoing a major expansion that includes the construction of a new six-story wing that will feature 96 additional guest rooms, more than 7,000 square feet of indoor meeting space, nearly 1,700 square feet of outdoor patio space and a three-level parking garage. Upon completion of the project, the Hotel Commonwealth will offer 245 rooms.

The hotel, which opened in 2003, completed a comprehensive renovation of its existing guest rooms in early 2014 while the lobby and meeting space were renovated in the first half of 2015. Below the hotel on the street level are three restaurants and bars, as well as nearly 12,000 square feet of retail space. The restaurants and retail space are not being acquired in the pending transaction that is expected to close in early 2016.

In its announcement, Xenia Hotels & Resorts did not divulge the seller of the property. However in December 2012, Boston University announced it had sold the Hotel Commonwealth to a partnership of Sage Hospitality and investment firm Fundamental Advisors LP.

"We are excited to have reached an agreement to acquire the Hotel Commonwealth, which allows us the opportunity to expand our presence in the highly desirable Boston market," says Marcel Verbaas, president and CEO of Xenia Hotels & Resorts. "The combination of the quality level of the hotel, its location in a vibrant neighborhood in a major lodging market and the opportunity to expand our relationship with Sage results in an excellent strategic fit for Xenia.”

The hotel will continue to be managed by Sage Hospitality of Denver, CO. Sage Hospitality has managed the hotel since 2012. Sage currently manages two additional hotels in the Xenia portfolio, the Marriott Napa Valley Hotel & Spa, in Napa, CA and the Residence Inn Denver City Center in Denver.

The Hotel Commonwealth posted RevPAR of $235 during the previous 12 months ended June 30, 2015. Xenia Hotels currently forecasts the hotel will generate EBITDA of $9.5 million to $11 million during 2016.

“With the addition of this hotel, the upcoming completion of our Grand Bohemian Hotels in Mountain Brook and Charleston and our recent acquisition of the three Kimpton hotels in Portland, Philadelphia and Santa Barbara we have successfully increased our presence in the lifestyle boutique segment across a number of dynamic lodging markets, which is a key component of our strategy,” Verbaas adds.

Xenia owns 49 hotels that comprise 13,054 rooms in 20 states and the District of Columbia, and has a majority interest in two hotels under development.