The Renaissance Boston Waterfront Hotel will be auctioned later this month, after the developer behind the hotel defaulted on its mortgage. But city officials say the foreclosure does not reflect the Renaissance Waterfront's success, and say that there is still a hospitality market in the area.
The Renaissance, which opened in early 2008, is owned by Loeb Partners Realty, a New York-based firm that also owns hotels in Florida, Louisiana, and Illinois. The company took out a $90 million mortgage on the Renaissance property in 2007, and officially defaulted last month, according to the Boston Business Journal.
Michele Mahl, the senior vice president at Eastdil Secured investment bank who is managing the auction for the Renaissance property, declined to comment for this story. Nick Rizzo Jr., managing director at Loeb, could not be reached for comment.
Susan Elsbree, spokeswoman for the Boston Redevelopment Authority, says the sale of the Renaissance hotel does not indicate that the hotel was unprofitable, or that the developers who buy the property will change its use.
“We have been in close contact with the lender about the issue. The Renaissance Boston Hotel is a performing asset, and we have been assured that this is about a financing structure that is unique to this hotel,” said Elsbree, who added that the city’s hotel market boasts a 6.1-percent increase in occupancy over the past year, and a 3.1-percent hike in daily room rates.
The Renaissance property sits on Congress Street in South Boston, down the street from the Boston Convention and Exhibition Center, and in the heart of Boston’s Innovation District, a neighborhood name coined by Mayor Thomas Menino. The Menino administration has envisioned a future for the waterfront area that includes the cutting edge of economic development, and has been courting high-tech companies and entrepreneurs to move to the area. Among the new developments on the waterfront is Seaport Square, a six million square-foot development project, which includes residences, commercial space and two hotels.
“All indications are that Boston’s hotel market remains among the strongest in the nation and this property is poised for continued success,” Elsbree said.