ORLANDO, FL—Xenia Hotels & Resorts, Inc. has agreed to acquire the Hotel Commonwealth in Boston for a purchase price of $136 million. The luxury independent, boutique lifestyle hotel is located in the Kenmore Square neighborhood of Boston, in close proximity to Fenway Park and Boston University. The hotel is currently undergoing a significant expansion including the construction of a new six-story wing featuring 96 additional guestrooms (raising the total number to 245 rooms), more than 7,000 sq. ft. of indoor meeting space, nearly 1,700 sq. ft. of outdoor patio space and a three-level parking garage. The transaction, which is subject to satisfactory completion of the expansion project and customary closing conditions, is expected to close in early 2016. The hotel will continue to be managed by Sage Hospitality.
“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,” said 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. With the addition of this hotel, the upcoming completion of our Grand Bohemian Hotels in Mountain Brook [AL] and Charleston [SC], and our recent acquisition of the three Kimpton hotels in Portland [OR], Philadelphia and Santa Barbara [CA], 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.”
The hotel is located near high-quality demand generators including Fenway Park, Boston University, Back Bay, Longwood Medical Area and Newbury St. The desirability of the hotel and its location for both corporate and leisure travelers is evidenced by its RevPAR of $235 during the trailing 12 months ending June 30. The company currently forecasts that the hotel will generate EBITDA of $9.5 million to $11 million during 2016.
The Hotel Commonwealth, which opened in 2003, features guestrooms averaging approximately 500 sq. ft. in size. The hotel completed a comprehensive renovation of its existing guestrooms in early 2014, while the lobby and meeting space were renovated in the first half of this year.
Sage Hospitality has managed the hotel since 2012. It currently manages two additional hotels in the Xenia portfolio, the Marriott Napa Valley Hotel & Spa and the Residence Inn Denver City Center.
“We are very pleased to expand our relationship with Sage Hospitality,” said Verbaas. “We believe Sage’s extensive experience in operating unique boutique properties, its in-depth knowledge of this property and our strong existing relationship make the company an ideal fit as the continued operator of this hotel.”