Hersha Hospitality Trust acquired the 136-room Envoy Hotel in Boston for $112.5 million.
“We are very pleased to acquire the award-winning, 4-Diamond Envoy Hotel in Boston’s Seaport District," said Jay H. Shah, Hersha’s CEO. "The Envoy will gain market share as the hotel continues to ramp following its successful debut in June 2015. In addition, we will implement a more aggressive revenue management approach and plan to re-evaluate guestroom touchpoints and service delivery, along with the hotel’s food and beverage offerings, to align the overall guest experience with the discerning business and leisure guests in this fast growing submarket.”
The Envoy’s location straddles downtown Boston and the Seaport. The hotel is proximate to corporate demand in Boston’s Financial District and the Innovation District, the 516,000-square-foot Boston Convention & Exhibition Center, and the U.S. Federal Courthouse and within walking distance to Boston Common, Faneuil Hall, the North End, South Station and three miles from Logan International Airport.
The Envoy has 136 rooms, all with floor-to-ceiling windows that showcase views of Boston Harbor, the Financial District and the North End. The Envoy is also home to the 6,000-square-foot Lookout rooftop bar, and the 3,900-square-foot Outlook restaurant and bar. The fee simple asset, acquired unencumbered of debt or management, is affiliated with Marriott’s Autograph Collection.
The acquisition was funded with 1031 exchange proceeds from the company’s sale of seven limited-service assets in Manhattan to the company’s joint venture with an affiliate of Cindat Capital Management at a trailing full-year 5.4-percent economic capitalization rate. The Cindat transaction generated $177 million in taxable gains for the Company. Through a series of reverse 1031 acquisitions that included the Ritz-Carlton Georgetown, the Sanctuary Resort and the Hilton Garden Inn M Street, as well as the acquisition of the Envoy, approximately $16 million of deferred taxable gains remain from the Cindat sale.