“Renovation set for 'iconic' Fairmont Copley”

Renovation set for 'iconic' Fairmont Copley

Posted: 02 Aug 2010 09:12 PM PDT

Boston's Fairmont Copley Plaza soon will have a new owner.

FelCor Lodging Trust Inc. has an agreement to buy the landmark 383-room hotel for $98.5 million from Fairmont Hotels & Resorts, which will continue to manage it.

The Texas real estate investment trust plans a $20 million "refreshing" of the 98-year-old, upscale Copley Square hotel known for its Oak Room steakhouse, ornate grand ballroom and Catie Copley, the black Labrador retriever that's its canine ambassador. Renovations will include a much larger fitness center.

FelCor's purchase, which equates to about $257,000 per room, will improve the quality of its portfolio and increase its revenue-per-available-room rates, according to Stephen Schafer, vice president of strategic planning.

After hiring a new CEO in 2006 and shedding 40-plus hotels in smaller markets, FelCor has been targeting hotels in Boston, New York and Washington, D.C. - markets with high barriers to entry, low supply growth and diverse sources of room demand.

"The Fairmont Copley is an iconic hotel," Schafer said. "It's irreplaceable, and it's in one of the best locations in Boston. The Boston market is going to have higher future growth faster than the rest of the industry."

FelCor owns 84 hotels and resorts in 23 states and Canada. It bills itself as the largest owner of "upper-upscale" all-suite hotels, with properties under the Embassy Suites Hotels, Doubletree, Hilton, Marriott, Renaissance, Sheraton, Westin and Holiday Inn brands. Funded with cash, its purchase of the Fairmont Copley is expected to close in the third quarter.

Toronto-based Fairmont bought the hotel in 1996 for a reported $70 million from Copley Plaza Hotel LP, which was majority-owned by Harvard Management Co. After a growth campaign that began when Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud became a major investor, Fairmont has been selling a lot of its hotels in the last few years.

"This sale is consistent with that strategy to become more of a management company than a real estate owner," said Paul Tormey, regional vice president and general manager. Fairmont also manages the Fairmont Battery Wharf in Boston, which opened in 2008.

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