In a sign of how far Boston schools will go to add student housing these days, Suffolk University appears poised to buy a well-known downtown hotel and convert it into a dormitory.
Suffolk has an agreement to buy the Ames Hotel on Court Street, near City Hall, for use as a residence hall, a top university official confirmed Monday. The 114-room boutique hotel, which opened in 2010 in the historic Ames Building, appears set to close early this fall. Suffolk aims to have students living there by the fall of 2020.
“We are definitely interested in that site,” said John Nucci, Suffolk’s senior vice president for external affairs. “It would be an ideal location for student housing, and our students will move out of private apartments and into a safe and supervised setting.”
A sale has not yet closed, and financial terms were not made available, but people familiar with the deal said Suffolk has the property under contract at a price of $60 million to $70 million. That’s significantly more than the $53 million the current owner, the Texas investment firm Invesco, paid for the hotel in 2015, but far less than it would be likely to cost Suffolk to build a comparably sized dorm downtown.
When Invesco put the Ames up for sale earlier this year, other hotel operators made strong bids for it, one person familiar with the matter said, but Suffolk’s offer was the most attractive.
The fact that a mid-size university might outspend experienced hotel companies for a boutique hotel steps from the Freedom Trail speaks to how precious student housing is for some schools, said Sebastian Colella, vice president at Pinnacle Advisory Group, a hotel consulting firm in Boston.
“That is surprising to me. It’s really in a fantastic location,” Colella said. “But these are the types of things universities are looking at now.”
Average room rates and occupancy rates both hit record highs last year in downtown Boston, he said, and the Ames has been performing well, especially since joining Hilton’s Curio brand in 2016.
The Ames Hotel opened nine years ago after a $40 million overhaul of the Ames Building, a 188-foot Romanesque tower that was the tallest building in Boston when it opened in 1889. At the time, it was hailed as a stylish addition to downtown’s sometimes-staid hotel scene. Invesco pumped another $5 million into upgrades.
Invesco did not respond to messages seeking comment on Monday, nor did the hotel’s general manager.
Employees were told of the sale last week. And while no closing date has been confirmed, hotel rooms are not available for booking on the Ames website after mid-September.
A final deal would give Suffolk a high-profile dorm in a prime location. Its facilities are spread among 10 Downtown Crossing and Beacon Hill buildings. It eventually wants to house about half of its roughly 5,000 full-time undergraduate students, up from the 30 percent it can house today.
Suffolk has a growing population of international students and, like many of its peers, it wants high-quality student housing to better compete, both for foreign and US-born undergraduates.
A hotel is ready-made for easy conversion into dorm space, Nucci said, and Suffolk hopes to have it ready for students to move in for the 2020-2021 school year.
“It’s very exciting,” he said.
But any plan to turn the Ames into a dorm will need to go through a community review process and win approval from the Boston Planning & Development Agency, Nucci noted. The administration of Mayor Martin J. Walsh has strongly encouraged colleges to add dormitory beds, part of a push to shift students out of traditional housing in city neighborhoods and free up apartments in a city with high demand for rentals.
A BPDA spokeswoman said it hasn’t received a formal proposal from Suffolk but looks forward to hearing about Suffolk’s plans.
“Mayor Walsh’s Housing Boston 2030 [initiative] identifies the creation of student housing as one way to address the city’s housing needs,” the BPDA said in a statement.