Sunstone Hotel Investors has agreed to buy the 1,053-room Boston Park Plaza Hotel & Towers from Rockpoint Group for US$250 million.
Sunstone Hotel Investors, Aliso Viejo, California, announced in its quarterly earnings report that it agreed to purchase the hotel on April 26. Sunstone said the gross purchase price equates to a 12.5x multiple on 2013 forecasted hotel adjusted EBITDA of US$20 million and a 6.6% capitalization rate on the 2013 forecasted hotel net operating income. Sunstone anticipates that during its 2013 ownership period, the Boston Park Plaza is expected to generate between US$8 million and US$9.5 million of hotel adjusted EBITDA and between US$6.5 million and US$8 million of hotel net operating income.
Highgate Hotels, Irving, Texas, will continue to manage the property and Sunstone has no plans to rebrand it.
Sunstone said it expects the acquisition to close during the third quarter 2013.
Sunstone’s initial renovation plans for the hotel include the build-out and lease-up of nearly 43,000 sq ft (4,000 sq m) of ground level and below-grade retail spaces, which predominately front Arlington Street and Park Plaza. Sunstone also plans to invest in certain upgrades to the hotel’s physical infrastructure, elevators, HVAC, façade and guest systems. Longer term, Sunstone may undertake a more comprehensive capital repositioning program to further enhance the hotel’s competitive positioning, subject to the development of a business case supporting such a repositioning program.