|By Mark Belko, Pittsburgh
Post-GazetteMcClatchy-Tribune Regional News
Jan. 25, 2013--A prominent Cleveland developer apparently isn't finished selling off property in Pittsburgh.
Forest City Enterprises is entertaining offers for the Sheraton Station Square Hotel, the Post-Gazette has learned.
The Sheraton represents the third property in Pittsburgh that the developer is seeking to shed. It also is selling the Station Square entertainment and office complex itself and the Liberty Center/Westin Convention Center Hotel property Downtown.
If it is successful, the only properties Forest City will have left in the region are the Mall at Robinson and an adjoining retail strip plaza.
When asked whether the 399-room hotel was for sale, Jeff Linton, Forest City spokesman, said, "I'm not going to comment on the hotel. I am not even able to confirm that it is, in fact, for sale."
But Forest City was close to selling the property last year. It had a letter of intent with Philadelphia-based HHM, also known as Hersha Hospitality Management, to buy the hotel, but the deal never was finalized.
PG graphic: Forest City properties (Click image for larger version)
Meredith Setzman, a HHM spokeswoman, declined to comment on whether the company had a letter of intent or whether it was still interested in buying the hotel. HHM operates 115 hotels in a host of cities in the United States, including New York, Boston, Philadelphia and Washington D.C.
"Since HHM engages in the evaluation of hotels on an almost daily basis, we don't comment about particular assets or deals we are exploring, until after a contract is signed and a transaction is closed," she said.
Mr. Linton said he was "not going to comment on potential deals that didn't come to fruition."
If a new deal is reached, it could involve a change in the hotel's flag.
The hotel has been a Sheraton since it opened in 1981, but other chains currently not represented Downtown could be interested in taking it over. Brands such as Hilton, Hyatt, Crowne Plaza and Radisson do not have presence in the Golden Triangle.
"I know the Hilton and Hyatt would love to have a presence in Downtown," said Mark Popovich, senior managing director of the Pittsburgh office of Holliday Fenoglio Fowler LP, a commercial real estate brokerage.
Mr. Popovich said the full-service Sheraton, with its riverfront location and picturesque views of the Downtown skyline, would make for a very attractive property to potential buyers.
"The Sheraton has always done well in the market from the time it opened. For a long time it was the [revenue per available room] leader and today investors are really interested in full service and select service urban hotels," he said.
Gerry McLaughlin, executive managing director of Newmark Grubb Knight Frank in Pittsburgh, said he wasn't surprised that Forest City would put the hotel up for sale.
"I think hotels in this area are doing quite well and it's certainly a good time to test the market, especially if Forest City is looking at the remainder of Station Square to put up for sale," he said.
The Sheraton wasn't included in the marketing of Station Square, the 669,800-square-foot South Side complex that Forest City put up for sale last year, even though it is a prominent attraction there. The CBRE real estate firm is handling the Station Square sale, which includes the Landmarks Building, home to the Grand Concourse restaurant; the Commerce Court office and retail complex; Bessemer Court with restaurants like Hard Rock Cafe and Joe's Crab Shack; and the Freight House Shops, which contains restaurants, shops and the Bradford School.
CBRE also is marketing the 27-story Liberty Center and the companion 618-room Westin for Forest City. Starwood Capital Group, a Greenwich, Conn., global investment firm, is a leading candidate to buy the Westin. Starwood Capital once owned Starwood Hotels & Resorts, which manages the Westin and the Sheraton.
Mr. Linton said earlier this month that Forest City decided to put Station Square and Liberty Center up for sale as part of a year-old strategy to focus on major markets such as New York, Boston, Washington D.C., Los Angeles and San Francisco where it has a significant presence.
Forest City acquired Station Square, a former Pittsburgh and Lake Erie railroad terminal, in 1994. It purchased the Sheraton in 1998 and expanded it by 104 rooms four years later at a cost of $25 million.
Mark Belko: firstname.lastname@example.org or 412-263-1262.
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