Carey Watermark Snags Upscale Philly Hotel
- May 20, 2015
Carey Watermark Investors Inc. has acquired a majority interest in the Ritz-Carlton Philadelphia, a 299-room luxury hotel, in a joint venture with Philadelphia Hospitality Partners, L.P., the owner of the property.
“It was a unique asset in an improving market with upside potential by virtue of its location, the value-add opportunities through the renovation and the Ritz Carlton/Marriott brand affiliation,” Michael Medzigian, Carey Watermark Investors’ president & CEO, told Commercial Property Executive. “Our philosophy is two—pronged to buy stabilized assets and to make acquisitions that provide value add opportunity through both renovations and operational improvements. This asset met both those value add opportunity criteria.”
Originally constructed between 1904 and 1908 as The Girard Trust Co., the rotunda and adjacent eight-story tower of The Ritz-Carlton Philadelphia were added in 1923. The building was expanded to 30 stories in 1931 and converted to The Ritz-Carlton in 2000.
The hotel includes 26,000 square feet of meeting and banquet space, including a 6,100 square-foot grand ballroom, a fitness center, business center, and the Richel D’Ambra Spa & Salon.
According to Medzigian, a $21.3 million comprehensive renovation of the property is planned beginning in the third quarter of 2015 and continuing through the second quarter of 2016, which will include all guest rooms as well as the lobby, meeting space, ballroom, corridors club lounge and the food and beverage outlets.
The hotel’s location is within the central business district as well as adjacent to City Hall. Dining and upscale shopping are nearby making it an ideal location for both business and leisure travelers.
“The market has been improving in recent years with 2014 occupancy the highest since 1949 and the expansion of the Pennsylvania Convention Center as well as other redevelopment projects underway have added demand for hotel rooms as the revitalization of the city continues,” Medzigian added. “The strength of the market can be evidenced by the recent booking of keynote events including the visit of the Pope and the Democratic National Convention.”
Philadelphia is considered one of the top 25 hotel markets in the country. According to PKF Hospitality Research, hotel occupancy in Center City Philadelphia hit 76 percent last year, the highest annual occupancy since 1949.