Chesapeake Lodging to Buy 430-Room Boston Marriott Newton for $77.3M in Cash
- Jul 08, 2010
July 8, 2010
By Barbra Murray, Contributing Editor
The Boston Marriott Newton in Newton, Mass., is the latest upper-upscale hotel to make it onto Chesapeake Lodging Trust’s shopping list. The nearly six-month-old Annapolis-based REIT signed a definitive agreement to acquire the 430-room hotel from CR/TPG Newton Hotel L.L.C.–a joint venture involving Cranston, R.I.-headquartered The Procaccianti Group, Newton Lower Falls, Mass.-based Charles River Realty Investors and Jacksonville, Fla.-based Rockpoint Group L.L.C.–for nearly $77.3 million in cash.
Located approximately 15 miles west of Boston at 2345 Commonwealth Ave., the 41-year-old, seven-story Boston Marriott Newton occupies an 11.5-acre site fronting the Charles River. The property has undergone extensive renovations over the last two years and, in addition to its guestrooms, features 20,000 square feet of meeting space, a restaurant and a fitness center.
Chesapeake plunked down a $3 million deposit for the hotel. As for financing the acquisition, the company plans to rely on borrowings from a revolving credit facility that it expects to secure in advance of the anticipated closing, which is on track to occur within the next 30 days. CR/TPG Newton Hotel will pay off debt attached to the property upon the closing.
The definitive agreement between Chesapeake and CR/TPG Newton Hotel comes just one year after the hotel last changed hands. Procaccianti, Charles River Realty and Rockpoint bought the Boston Marriott Newton from Host Hotels & Resorts Inc. in July 2009 for $29 million. What turned out to be just a one-year hold dovetails with the joint venture’s original strategy. “We have completed our property improvement plan,” Brian H. Kavoogian, President of Charles River Realty, told CPE. “We’ve done a lot to improve the margins, operations and the physical condition of the hotel, and the valuation has increased over the last year. It was time.” That is not to say that there aren’t advantages for the buyer. “There is a real opportunity for growth and income, as well, given the improvements occurring in the hotel market.”
Chesapeake’s acquisition of the Boston Marriott Newton will mark the REIT’s second purchase in Beantown. In March, the company snapped up the 498-room Hyatt Regency Boston–and an air rights contract–for approximately $113.1 million. Chesapeake has struck a few other notable deals since the completion of its January 27 IPO. In June, it closed the $46 million acquisition of the ritzy 188-room Hilton Checkers Los Angeles. Additionally the $25 million purchase of the 153-room Courtyard Anaheim at Disneyland Resort hotel in Anaheim, Calif., is currently pending.