The Liberty Hotel Boston, a Luxury Collection Hotel
Rich with history and full of ornate architecture, The Liberty, a Luxury Collection Hotel, offers a unique blend of history, high-style luxury and homegrown warmth.
Opportunity
HEI identified an off-market opportunity to create significant value in an under-positioned asset through our ability to untangle a complex capital structure, select the highest-and-best rebranding strategy and quickly reposition the asset for maximum cash flow. Despite the high quality of the recently completed conversion of the historic Charles Street Jail into a luxury hotel, the property was lacking a powerful distribution system, and its operating expense structure left the hotel far from its maximum profitability.
HEI Value creation
HEI waded through a complex existing ownership structure including a leasehold, intact Historic Tax Credits (“HTC”), an existing lender and multiple equity investors with different investment horizons to recapitalize the ownership and position the hotel for maximum value creation. HEI first identified and implemented a Luxury Collection branding strategy, positioning the hotel to capture high-rated business transient demand in the market which led to a 13-point increase in market share. To properly position the hotel, we implemented multiple weekly lifestyle activations to drive revenue which, combined with significant unnecessary expense reductions, catapulted profitability by $7.8 million within two years. To prepare for sale, we restructured the capital stack upon expiration of the HTC period which led to a clean exit to a public REIT, realizing a 54% IRR.
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