Boston's Historic Fairmont Copley Plaza Trades in $170 Million Deal
Boston’s Historic Fairmont Copley Plaza Trades in 0 Million Deal
RLJ Lodging Trust Sells 383-Room Grand Dame Hotel Acquired in FelCor Merger to Ashkenazy Acquisition Corp.
The owner of Faneuil Hall Marketplace and South Station added another iconic Boston asset to its holdings following news New York City-based Ashkenazy Acquisition Corp. acquired the Fairmont Copley Plaza from RLJ Lodging Trust (NYSE: RLJ) for $170 million, or approximately $444,000 per key.
The Fairmont Copley Plaza was constructed in 1912 overlooking Copley Plaza and steps away from the famed Newbury St. shopping corridor, Beacon Hill and Freedom Trail in Boston’s Back Bay.
A AAA-4 Diamond Award winner for 23 consecutive years, the historic grand dame hotel consists of 383 guestrooms, including 17 suites, and features 23,000 square feet of meeting and event space, including a 5,720-square-foot grand ballroom, and two restaurants – The Oak Room and The Oak Bar.
RLJ, a hotel real estate investment trust headquartered in Bethesda, MD, acquired the hotel following the firm’s $2.95 billion purchase of Irving, TX-based FelCor Lodging Trust (NYSE: FCH) this past August. The merger resulted in the launch of the third largest “pure play” hotel REIT, with FelCor continuing to operate as a wholly-owned subsidiary of RLJ.
“We are pleased by the execution of the sale of this iconic asset at a very attractive valuation that is significantly accretive to our shareholders across a number of metrics. The disposition of this asset is consistent with our objectives of selling non-core assets and unlocking shareholder value,” said Ross H. Bierkan, president and CEO of RLJ Lodging Trust. “Our ability to sell this asset shortly after closing the merger highlights the team’s focus on executing our key priorities in a disciplined manner.”
The $170 million sale price represents a roughly 4.6% cap rate on the hotel’s 2017 projected net operating income, and a hotel EBITDA multiple of approximately 16.5x based on the hotel’s 2017 projected hotel EBITDA, according to an RLJ press release.
RLJ intends to use the net proceeds from the sale of Fairmont Copley Plaza primarily to down debt.
Please see CoStar COMP #4081270 for more information on this transaction.