The largest hotel in the city of Boston has been sold, but it remains unclear if it will remain a Sheraton property - or even a hotel.
The Sheraton Boston was sold by parent company Host Hotels & Resorts Inc. to a pair of investment firms, Varde Partners and Hawkins Way Capital, for $233 million according to WCVB Boston.
Host Hotels appeared anxious to get rid of the property, agreeing to a $163 million bridge loan to the two investment firms. It paves the way for Host to purchase the Hotel Van Zandt in Austin, Texas, for $246 million.
"The sale of the Sheraton Boston allowed us to redeploy capital into other assets that we believe will bolster the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) growth profile of our portfolio," James F. Risoleo, president and chief executive officer of Host Hotels, said in a statement to WCVB.
The hotel just reopened in August of 2021 after having been closed due to COVID for 17 months, but business has been scarce. The virus chased off the usual business traveler at the nearby Hynes Convention Center, and Northeastern University is using some of the rooms at the Sheraton Boston as overflow student housing.
The 29-story Sheraton Boston Hotel has 1,220 rooms and is situated in Boston's tony and touristy Back Bay neighborhood.
"Our strategy for the joint venture is to build a high quality, inflation protected, and cash flow generative portfolio in major U.S. cities," Francisco Milone, partner at Varde Partners, said in a joint statement. "The pandemic is driving this opportunity among distressed hospitality and select housing assets in gateway markets with high demand for certain alternative hospitality, residential, and student housing products."
Added Ross Walker, co-founder and managing partner of Hawkins Way Capital, leading to speculation as to whether the hotel remains a Sheraton: "We will continue to leverage our hospitality, multifamily and student housing expertise to refresh and/or reposition assets such as the Sheraton Boston Hotel in order to seek to maximize value."
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