|By Donna Goodison, Boston
HeraldMcClatchy-Tribune Regional News
Dec. 19, 2012--The hotel credited with helping to revitalize Boston's Kenmore Square is getting a new owner.
Denver-based Sage Hospitality confirmed it's buying the 149-room Hotel Commonwealth from owner Boston University.
The purchase also includes leases for the upscale boutique hotel's retail and restaurant tenants and a parking garage that backs up to the MassPike.
The deal is set to close tomorrow for undisclosed terms, said Michael Everett, chief investment officer for Sage, a privately held company with 55 hotels.
Sage has been targeting urban assets for the past 15 years and found success with similar hotels in Denver, Chicago, Portland and San Diego, Everett said.
"Boston, specifically, has been a target of ours given the health of the market," he said. "The strength of the hotel market the last 24 months has been very, very impressive. We don't see a lot of new product coming into Boston over the next two to three years, so there's limited competition on a go-forward basis."
A BU spokesman said the school was "hopeful that we'll close a deal soon."
Everett would not reveal the purchase price for the hotel. A source close to the deal put the price for the hotel alone in the range of $275,000 per room -- or $41 million _ but said the leases put the deal's total value much higher. "The retail component is worth a significant part of the deal," the source said.
Current tenants include Zinga Frozen Yogurt, Century Bank, Hunts Photo and Video, Panopticon Gallery, Persona Jewelry, Wine Gallery, restaurants Eastern Standard and Island Creek Oyster Bar, and the Hawthorne cocktail bar.
The hotel's parking garage also has redevelopment potential because it's zoned for higher density,
Sage plans to spend a few million dollars on cosmetic upgrades to guest rooms.
The $70 million, six-story hotel, which replaced 14 rundown buildings, was unveiled in 2003, drawing immediate criticism over the facade's quality, style and color. Billed as French Second Empire style during permitting, it ended up resembling a plastic Lego sculpture, prompting a ?$4 million makeover.
(c)2012 Boston Herald
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