Newton’s Hospitality Properties Trust has entered into agreements to acquire the entity which owns the 22,000-square-foot Royal Sonesta Hotel in Cambridge. The 400-key hotel on the Charles River has two restaurants/bars.
The deal also includes an agreement to lease the Royal Sonesta Hotel in New Orleans (483 keys, five restaurants/bars and 20,000 square feet of meeting space) for approximately $150.5 million.
The Cambridge and New Orleans hotels are currently operated by Sonesta International Hotels Corp. (SNSTA). The Cambridge hotel is owned by a SNSTA subsidiary and the New Orleans hotel is leased by a SNSTA subsidiary.
HPT’s acquisition is a component part of a transaction that involves the acquisition by merger of all of SNSTA’s shares by Sonesta Acquisition Corp. (SAC), an affiliate of Reit Management & Research LLC, the manager of HPT. Upon completion of the merger, SAC will transfer the entities which own the Cambridge hotel and lease the New Orleans hotel to HPT. HPT said it expects to prepay an existing mortgage encumbering the Cambridge hotel, which is included in the purchase price. Prior to completion of the merger, SAC will be capitalized independently from HPT with $25 million. The transaction is expected to close during the first quarter of 2012.
After the merger and sale to HPT of the entities which own the Cambridge hotel and lease the New Orleans hotel, SAC will retain the existing management business of SNSTA and the hotels will continue to be managed by the same management team which now operates these two hotels. Also, SAC and its Sonesta management team will be available to operate other hotels for HPT, including certain hotels HPT now owns and is considering rebranding, and hotels it may selectively acquire in the future.
"HPT is pleased to be adding the Sonesta management team to the hotel operators with whom it does business," said John G. Murray, president of HPT. "Sonesta is a niche brand with a strong reputation for high quality accommodations and guest services. HPT looks forward to working with Sonesta personnel to expand the Sonesta brand."
