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A downtown Boston hotel that was part of a portfolio Blackstone lost to foreclosure has found a new owner.
Arch & Devonshire LLC bought the 178-room Club Quarters Hotel property and obtained a $45M bridge loan from Seven Hills Realty Trust along with the acquisition, the lender announced Tuesday.
The loan has a three-year initial term with two one-year extension options. Seven Hills, which is managed by RMR Group affiliate Tremont Realty Capital, said JLL represented the borrower, but it didn't provide further information on who is behind the LLC that bought the property. The sale hasn't appeared in deed records.
"The closing of the loan to finance the acquisition of this hotel demonstrates our ability to identify and execute compelling loan investment opportunities," Seven Hills Chief Investment Officer Tom Lorenzini said in a statement. "Furthermore, we continue to be active in the market and maintain a strong pipeline of quality loan opportunities to generate attractive risk adjusted returns for our shareholders."
The sale comes after asset management giant Blackstone lost the asset.
Blackstone had held a $275M senior loan and $61M mezzanine loan on a four-property portfolio of Club Quarters hotels in Boston, San Francisco, Chicago and Philadelphia. It had acquired the 1,228-room portfolio for $283M in 2016. The loan matured in 2020 and was transferred to special servicer CWCapital after Blackstone went into default.
Reports emerged in May 2023 that the special servicer was pursuing foreclosure on the portfolio. Earlier this month, servicer commentary in the Morningstar Credit database, first reported by The Real Deal, indicated the lender was moving forward with foreclosure actions against the individual hotels.
The servicer commentary said the Boston hotel sold to the CMBS trust through a foreclosure sale in February, and the trust was under contract to sell it for $75M, a deal it said was expected to close by the end of the year.
The Boston hotel specializes in business travel, which had struggled until recently.
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