The Boston Park Plaza Hotel & Towers is being sold to a California real estate investment trust for $250 million, almost double the price it sold for two years ago.
Sunstone Hotel Investors Inc. plans to buy the 1,053-room downtown hotel from the Rockpoint Group, a Boston real estate private equity group, which owns the hotel with longtime owner Donald Saunders. The Rockpoint partnership acquired the 86-year-old Park Plaza in 2011 from Starwood Hotels and Resorts for $126 million, according to property records.
The deal is expected to close at the end of July. Sunstone plans to invest an initial $15 million in the property, improving the facade, elevators, and other infrastructure and renovating 43,000 square feet of retail space on the ground floor and below-ground levels. In a few years, Sunstone may invest as much as $50 million to upgrade the hotel, chief executive Ken Cruse said in a conference call Tuesday.
Sunstone owns nearly 30 hotels nationwide, including the Boston Marriott Long Wharf and the Boston Marriott Quincy.
The $124 million increase in the sale price reflects investments Rockpoint made in the Park Plaza Hotel, including adding about 100 rooms, as well as the strength of the Boston hotel market, said Matthew Arrants, executive vice president of the hospitality consultancy Pinnacle Advisory Group.
Hotel occupancy has been at or near capacity in Boston since 2011, Arrants said, averaging around 78 percent, and there are not enough new hotels in the works to lower occupancy levels or prices.
The Park Plaza is more affordable than many hotels in the nearby Back Bay, with room rates this weekend around $180 a night, compared to about $300 a night at the Taj Boston, Fairmont Copley Plaza, and Loews Boston Back Bay Hotel.
“Boston needs moderately priced hotel rooms, and Park Plaza helps to fill that need,” Arrants said.
The Park Plaza opened in 1927 as the Statler Hotel, and was among the first hotels to put a radio in each guest room, according to the hotel’s website. The Park Plaza also led the way with in-room telephones, complimentary newspaper delivery, and “do not disturb” signs. In 1976, the hotel was bought by the Irving M. Saunders family, and the name was changed to the Boston Park Plaza Hotel & Towers.
The hotel has about 400 union workers, and the sale will not affect their contract, according to Unite Here Local 26, the hospitality workers union that represents them.