The Taj Boston hotel has officially been purchased from Indian Hotels Co. Ltd. By a consortium of real estate developers, though the final purchase price has been kept under wraps. The new owner, which is affiliated with a handful of prominent real estate firms, has yet to announce specifically what they plan to do with the hotel.
The History of the Taj Boston Hotel
The luxury hotel of Taj Boston has been in continuous operation since 1927, at which time it was opened by The Ritz Carlton. Considered to be a Boston landmark, the hotel anchors both the fashionable Newbury Street and Boston Public Garden. Located in the heart of the Back Bay, the hotel was once part of a chain using the Ritz-Carlton name. The name was changed to Taj Boston in January 2007 after it was purchased by Taj Hotels, otherwise known as Indian Hotels. Indian Hotels made the purchase of the Ritz-Carlton Boston Hotel, which is located at 15 Arlington Street, for $170 million.
Purchasing a Landmark
Designed and constructed by George B. Post & Sons, the Taj Boston boasts 273 rooms. Of these, 44 are listed as suites. The hotel underwent manor restoration in October 2002, at which time it was celebrating its 75th anniversary. As part of the renovation process, it was updated with 21st century amenities while still maintaining its 20th century deco look.
Earlier this year, the Mumbai-based firm of Indian Hotels placed the hotel on the market for $125 million, a full $45 million less than the last sale price. While official records of the sell price have not been listed, property records indicate it was sold for near what the company was seeking. Additional records indicate that Newbury Owner LLC took out an $85 million mortgage for Deutsche Bank AG on July 12, which would result in a loan-to-value ratio of 68 percent with the targeted sale price of $125 million.
A Change of Ownership
The new owner of Taj Boston is affiliated with a number of real estate firms, including New England Development, Rockpoint Group, Eastern Real Estate, Highgate and Lubert-Adler. According to a statement made by Stephen R. Karp, who is the chairman of New England Development, the company plans to make additional improvements to the internationally acclaimed hotel in an effort to ensure it becomes the focal point of many cultural activities in the city.
As the new owners prepare to make improvements to the Taj Boston, Indian Hotels Co. has announced that it will use the proceeds from the sale to cut down some of the company’s debt. Despite having rooms that are available at a cost typically ranging from $350 to $3,000 per night, the hotel has operated at a loss in recent years. In fiscal year 2016, it generated $34.1 million in revenue at a loss of $7.3 million.
Under the agreement of the purchase, the Taj will retain its branding through a long-term management services agreement. Eastern Real Estate, New England Development and Highgate will serve as the hotel’s asset manager.