Sunstone Hotel Investors Inc. agreed to buy the 1,053-room Boston Park Plaza Hotel & Towers hotel, a historic property near the city’s Boston Common park, for $250 million.
Sunstone also plans to invest an undisclosed amount on renovations, including upgrades of the hotel’s elevators and facade, the Aliso Viejo, California-based real estate investment trust said in a statement today announcing its first-quarter earnings. Longer term, the company may spend more to “further enhance the hotel’s competitive positioning.”
The hotel, which opened in 1927 and is located in Boston’s Back Bay neighborhood, “generates significant in-place cash flow and an attractive yield on the company’s initial investment,” Sunstone said in the statement. The property has eight restaurants, including a McCormick & Schmick’s location and Statler’s Lounge, according to the property’s website. Nightly rates start at $160.65 for the week of May 13.
Sunstone agreed to buy the property, which will remain unbranded and continue to be managed by Highgate Hotels, at a 6.6 percent capitalization rate, based on the expected 2013 net operating income, the company said. A cap rate, used by real estate investors to measure yield, is a property’s annual NOI divided by purchase price.
The transaction, agreed to on April 26, is scheduled for completion in the third quarter, Sunstone said.
The company, on May 1, also bought the 250-room Hilton New Orleans St. Charles for $59.4 million, or $237,400 per room, Sunstone said in the statement. It paid the same amount per room for the Boston property.