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Boston’s largest hotel just sold. Changes could be in store.

The Sheraton Boston has a new owner just a few months after re-opening following a lengthy pandemic closure.

The Sheraton Boston has been the scene of many major events over the years, including the 2004 South Africa Partners Benefit Gala, which featured the late Archbishop Desmond Tutu.Brett, Bill Globe Photo

The largest hotel in Boston has a new owner, and that owner may have new plans for it.

Investment firms Värde Capital and Hawkins Way Capital closed this week on a $233 million deal to buy the Sheraton Boston on Dalton Street in Back Bay. The 1,220-room hotel had been owned by Host Hotels & Resorts, which put it up for sale last summer, shortly after the property re-opened following a lengthy pandemic shutdown.

At roughly $191,000 per room, the sale price is far below the value of major hotels sold in Boston before the COVID-19 pandemic clobbered business travel and convention business, and is even significantly lower than some hotel deals that have taken place in the city since.


The downtown Boston hotel industry has been particularly hard-hit in the pandemic, with occupancy rates running at just 45 percent in 2021 and revenue per room — a key industry stat — averaging just $95 per night, less than half what it was in 2019, according to data from hotel consulting firm Pinnacle Advisory Group.

The Sheraton, a 29-story tower next to the Hynes Convention Center and Prudential Center, has been affected more than most. It was closed from March 2020, when COVID-19 essentially shut down Boston, until reopening on Aug. 1, 2021. Since then, conventions at the Hynes have been scarce, and business travel slow to resume. Today, Northeastern University leases a block of rooms for student housing.

It’s not clear what Värde and Hawkins may have planned for the complex.

As part of the deal, the buyers are taking out a $163 million “bridge loan” from Host Hotels, which had planned renovations before deciding to put the hotel on the market. In a statement, the new owners raised the possibility of “alternative” uses — either hospitality or housing — which could signal a shift from the traditional large convention center-oriented hotel the Sheraton has long been.


“We will continue to leverage our hospitality, multifamily and student housing expertise to refresh and/or reposition assets such as the Sheraton Boston Hotel in order to seek to maximize value,” said Hawkins Way managing partner Ross Walker.

The hotel has a long-term relationship with Sheraton, making a shift entirely away from hotel use unlikely. And in a follow-up e-mail, Walker said he was speaking in general terms about plans for the Sheraton Boston.

“We do not have any new ideas to discuss at this time,” Walker wrote.

Still, some alternative use, at least for part of the massive property, may be worth considering, said Sebastian Colella, a vice president at Pinnacle.

“With the impacts of the pandemic, new hotel supply in recent years, and rising operating costs, hotel owners and investors are evaluating the highest and best use of these properties,” he said. “It would make perfect sense for a new buyer of a hotel this size to consider downsizing the room count.”

Hawkins Way also owns the Copley Square Hotel, on Huntington Avenue, which has been closed for renovations since the original pandemic shutdown. Walker said that work is complete and the hotel is now “ready to open,” pending final city permits.

Tim Logan can be reached at timothy.logan@globe.com. Follow him on Twitter at @bytimlogan.