FelCor Lodging has confirmed it will purchase the Fairmont Copley Plaza Hotel in Boston for $98.5 million following a deal with an affiliate of Fairmont Hotels & Resorts.
The Irving, Texas-based trust will take control of the 383-room property during the third quarter, with the deal to be funded by cash on hand.
Under the terms of the deal Fairmont will continue to manage the property under a long-term agreement.
“This irreplaceable asset is a significant acquisition for FelCor,” explained FelCor president Richard Smith.
“This hotel will improve the overall quality of our portfolio, increase future RevPAR and EBITDA growth rates and further diversify our portfolio by location, customer mix and product mix.”
The Fairmont Copley Plaza is a 383-room, historic hotel located in the heart of Boston’s Back Bay on Copley Square. The property includes 23,000 square feet of meeting space, which features the 5,720 square-foot Grand Ballroom.
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The $98.5 million purchase price represents approximately $257,000 per key, which is a significant discount to replacement cost.
“The Boston hotel market, particularly the Back Bay area, has extremely high barriers to entry and diverse demand generators and is one of our three stated targeted acquisition markets,” continued Mr Smith.
“This transaction represents a rare opportunity to gain entry into this submarket at an attractive price per room.”
The hotel features two of the most prominent dining and entertainment establishments in the city: The Oak Room and The Oak Bar.
The Oak Room is one of the leading steakhouses in Boston, and The Oak Bar features an award-winning menu and has been recognised as the Best Hotel Bar by Boston Magazine.
The property underwent a major renovation in 2004, totalling $25 million, which included all guestrooms and upgrading the fourth floor to the premium Fairmont Gold.