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BU Sells Hotel Commonwealth to Sage Hospitality

Luxury hostelry revitalized Kenmore Square


SOLD: Large Back Bay residence, 149 RMS, BALLPARK VU. European-style with luxury appointments in sizzling neighborhood. Kitchen with award-winning food service. Convenient access to public transportation, snazzy retail shops (some in-house) and restaurants (ditto).

BU sold the four-star Hotel Commonwealth this week to a partnership of the Denver-based Sage Hospitality and the investment firm Fundamental Advisors LP for $79 million in a deal that includes the leases for hotel tenants, notably its restaurants, and the parking lot.

The sale capped an era in which many observers applauded the influence of the 10-year-old hotel, with its 1,500-square-foot luxury suite and room amenities—red roses, artisanal cheese trays, chocolate truffles—on Kenmore Square’s formerly seedy character.

Sage owns and runs hotels under such brands as Westin, JW Marriott, Sheraton, Doubletree, and Hilton. It also runs its own independent hotels and several restaurants.

“The sale is aligned with Boston University’s long-term interest in improving Kenmore Square as a commercial gateway to the Charles River Campus,” says Gary Nicksa, BU’s senior vice president for operations. “Sage Hospitality shares our vision of continuing to support the ongoing transformation of the square into a vibrant destination.”

500 block of Commonwealth Avenue in Boston circa 1983, Hotel Commonwealth

Then: the 500 block of Commonwealth Ave. in 1983, prior to construction of the Hotel Commonwealth. Photo by Boston University Photography

Nicksa says the University has always considered Kenmore Square to be a commercial area and not an academic or a research space. BU sold the building while retaining the underlying land, which it will lease to Sage, “a fairly common way of selling commercial real estate,” he says, and one that allows the University to “maintain a long-term interest in the ongoing development of Kenmore Square.” BU first bought property in Kenmore Square in 1982.

Nicksa says proceeds from the sale will be invested in the University’s endowment and will support its academic mission.

Sage Hospitality CEO Walter Isenberg, whose company runs 60 hotels in 18 states, says the Commonwealth “fits perfectly into our strategy of acquiring high-quality lodging experiences in top hotel markets in the United States.” He says BU “created one of Boston’s finest hotels, and Sage will build off of that strong foundation to take the hotel to the next level.”

Barry Bloom, a School of Hospitality Administration associate professor, says Boston is one of the nation’s hottest hotel markets, with the seventh highest occupancy rate for U.S. cities. In 2011, the occupancy rate here topped 71 percent, while the national average is 60 percent.

Hotel Commonwealth, Kenmore Square, Boston

Now: A 2009 view of Hotel Commonwealth and Kenmore Square from the roof of Myles Standish Hall. Photo by Kalman Zabarsky

Bloom says interest in the hotel may reflect the market’s belief “that Kenmore Square, as a recently revitalized neighborhood, has a significant potential upside.” In that context, the Commonwealth gleams especially bright, he says, and its managers have done an excellent job keeping top-notch facilities and guest service. The hotel has been rated number one among 73 Boston hotels in TripAdvisor.com’s rankings. The hotel has been praised in Travel & Leisure and Conde Nast Traveler, and its restaurants and bar have wowed Boston Magazine as best brasserie and late-night dining (Eastern Standard), best upscale seafood restaurant (Island Creek Oyster Bar), and best upscale bar (the Hawthorne). The three will continue to be run by their current leadership, Sage Hospitality says.

Upgrading Kenmore Square had been a priority for the University as far back as 1986, when head shops and noisy nightclubs pockmarked the area. The University opened Barnes & Noble at BU, Boston’s largest bookstore, and the notorious Rathskeller—a punk-rock club that featured future superstars, but fueled party-hearty rowdiness—shut down in 1997.

The Hotel Commonwealth, after a false start that had the city demanding, and the developer agreeing to, design changes (the initial façade had wags dubbing the garish gargantuan “Disney World”), became a veritable Taj Mahal in the neighborhood, while Kenmore Square was reborn as an R&R dining and shopping hub.

Rich Barlow

Rich Barlow can be reached at barlowr@bu.edu.

22 Comments on BU Sells Hotel Commonwealth to Sage Hospitality

  • Ian on 12.21.2012 at 8:11 am

    Sounds like Kenmore Square used to be wonderful.

    • Nadine on 12.22.2012 at 1:00 pm

      Yes indead. BU accommodated its international students with its services. It made it beat any university ‘s hospitality.

  • Rubes on 12.21.2012 at 9:59 am

    So, Sage will now “take the hotel to the next level?” What does that mean? I hope that does not mean that this very nice, expensive hotel will now become even more exclusive and totally out of reach for BU’s academic departments. We use the hotel for visitors and speakers, who often comment on how very nice and convenient it is, but frankly even at the BU rates it’s just barely affordable for our budget. This hotel serves the BU community very well just as it is, and I’d hate to go back to housing visitors at less desirable and/or less convenient hotels.

  • AP on 12.21.2012 at 10:53 am

    They should have renovated those cute old brownstones with turrets into a hotel, instead of building a whole new building. They were cute!

  • Mark on 12.21.2012 at 11:04 am

    There were no head shops in Kenmore Square in the 1980s. The Rat was not notorious to those who liked city life. It was a legendary rock and roll nightclub. I don’t recall rowdiness outside the club.

    The suburban mentality that gentrification both causes and epitomizes, views anything unpredictable, unfamiliar, or difficult to categorize as threatening.

    Kenmore Square is now “safe” because the hotel that dominates it attracts mostly upper middle class white people and is without much street life. Red Sox fans move in and out as predictable as the Red Sox schedule — no surprises, and nothing to disturb the profit-making that is now the sole purpose of the area.

    It is now much more like the suburbs from which many BU students left for study in a city. This is ironic perhaps, but all part of the plan to give them city living without the threatening diversity of city life.

  • Dana on 12.21.2012 at 11:14 am

    I agree with Rubes. There is so little guest housing near BU for speakers that we have come to rely on Hotel Commonwealth for what is normally available on campus at other universities. We can barely host speakers as it is, but at least Hotel Commonwealth made them feel special and did not require extra transportation to get them to the school.

  • Lisa on 12.21.2012 at 5:44 pm

    In a nutshell, everyone will be charged more for vacation housing.

  • R. Reed on 12.23.2012 at 1:27 am

    Let’s hope the new owner does not screw up a wonderful hotel.

  • Steven on 12.23.2012 at 2:21 pm

    Only sold for 79M? Compared with recent similar buyout transaction, this is not a good deal!!!

    • damadoranosaurus on 01.04.2013 at 5:47 am

      Babson grad? Clearly comps are only one method of valuation. Google “cap rates.”

  • posicionamiento web on 12.24.2012 at 1:08 pm

    They should have renovated those cute old brownstones with turrets into a hotel, instead of building a whole new building. They were cute!

  • Loraine Levi on 12.26.2012 at 7:27 pm

    The homogenization of Kenmore Square! Actually, When I attended
    SED grad school in the early 80’s, Kenmore was very seedy and a little scarey!
    I just wish we could have a mix of independant and upscale businesses.
    But small businessmen can’t afford the rents anymore.
    Just a sign of the times….sigh!

  • Tony on 12.31.2012 at 4:42 am

    It’s sad to look at the Executive Profiles of Sage Hospitality. It looks as though a majority of their team are Cornell Hospitality grads. Perhaps someone should ask Mr. Bloom why Cornell graduates seem to control the Hospitality Industry while BU SHA grads are mid-level managers. Seems like for the cost of both programs, BU should be moving in the right direction, however, if you look at the Alumni Boards and committees Cornells hotel school has in place, it makes BU’s program look like a joke. If BU in fact did “own” the hotel, then why are there no courses tied into the hotel- instead, we have students working at the front desk or bell services. This doesn’t really set students up to become executives in my opinion. The vision of SHA needs to change, and unfortunately BU didn’t take up the chance while they owned a top hotel (look at the student run hotel for Cornell… it’s STUDENT run).

    • Joe on 01.04.2013 at 10:23 am

      Hey Tony, before you go bashing, become more informed. SHA students work at major hotels in the city like Four Seasons, Mandarin Oriental, Ritz Carlton, Marriott, Hilton, Hyatt, Starwood. Companies prefer braned hotels on resumes as well. Placement rates after graduation are quite competitive (even most of the same companies) as Cornell’s.

      • Tony on 01.05.2013 at 8:15 pm

        That’s great but the key word is “work.” SHA students are built to be career mid-level managers while other H schools build leaders. That’s fantastic that some students work in hotels, but how many ex- gm’s run major international 5 star hotels? I’m not talking Courtyard Marriott’s here either… How many CEO’s of asset management companies, or partners at Top 5 consulting firms does BU have? If so, are they actively involved with BU and assist with job placement? A recent ranking came out of H schools and BU isn’t even in the Top 10 for North America. As a BU SHA alumni, I should have cut the cost of my degree by 75%- you don’t need an expensive hospitality degree from a 3rd tier program to be a Front Office Manager, or Restaurant Manager, or Director of Housekeeping- SHA builds career “workers” which i don’t think justifies the 200k cost of education. Just my opinion… btw, how many of our Board Members are actual SHA graduates- shouldn’t that say a lot?

        • Malcolm on 01.11.2013 at 8:12 pm

          Upfront, I am a BU student and I work as a butler at the Fairmont. But I am not a SHA student and I have no intention of working in the hospitality industry. You have valid concerns about the lack of opportunities for SHA students… most will probably become mid-level managers are superb hotels. At the Fairmont, those who studied hotel management are typically entry level concierge or night managers. With 2+ yr experience, they have the skills to begin operations as a front-office manager. Honestly, I don’t know how Cornell places better. The skill level can’t differ that much even between a first and a fourth tier school.
          At the highest level of management (like hotel CEO’s), it’s no longer a hospitality game, it’s purely finance. You need to be able to understand real estate, market research, cash flows, branding, accounting, operations, HR, and the works. Your duty is no longer to the guests, but to the shareholders.
          200k education… yes, college is very inflated. It should be clear that working in hospitality is not lucrative by any means. Best returns are in engineering/CS/mathematics. But you do what you love and if you can afford it, then SHA is perfect.
          One tip for hospitality students is to start at the bottom, as a bellhop, valley and/or room-service/waiter. That is where you get the best exposure to the meat of operations. The, when you get to management, you will laugh at the ignorance of the other managers who don’t know jack about what goes into delivering an authentic and memorable experience. Hands down, (for learning curve purposes) it would be better to have a low position at a top hotel than a great position at an average hotel.

          • Tony on 01.16.2013 at 2:25 pm

            Your incorrect Malcolm, though, as someone not in-tune with the industry it’s understandable. I’m talking about consulting firms (the deloittes and so on), asset management companies (the jones lang lasalles and so on), and all the way down to the boutique firms. Look at their executive teams- not many come from BU but a ton come from Cornell. Not to mention, Michigan State, Penn State, UNLV (albeit they have Vegas) and so on. I mean, these are good schools, but for BU tuition, we should be running circles around them. Just feels like a waste of money.

          • Tony on 01.16.2013 at 2:28 pm

            sorry, just to clarify- the hospitality sectors of those larger companies (deloitte, JLL)

          • Jess on 04.30.2013 at 10:47 am

            Malcolm, you couldn’t be more right with your suggestion to start at the bottom. Managers who have worked in multiple positions within an organization are more successful and able to see things through their employees eyes.

          • CU student on 05.28.2013 at 1:52 pm

            I’m a Cornell SHA student (in case I can give a little insight into your comment). I don’t know anything definitive about the BU’s hotel program so I can’t make any comparisons, but I obviously know Cornell’s program.

            (1) Competitive program: Although there might not be a direct correlation between skills/knowledge gained in Cornell’s program vs others, it is the most competitive to to get in and even more so within the school. I have experience in multiple colleges within Cornell (sciences to hotel) and I honestly haven’t worked as hard in any of the other colleges as I do in the hotel school (keeping in mind one of the hardest working of even the Ivy League).

            (2) Although it’s considered a “hospitality” school, Cornell’s SHA is much more of a business program. We also have many core requirements regarding more hospitality specific activities, but much of our core curriculum is almost identical to our undergraduate business school’s major requirements. In fact, hotelies were recently denied the ability to go for the new university-wide business minor because our curriculum was identical, minus one requiremen, which was only a general business management class.

            This was actually quite frustrating for many of the more “achieving” hotelies (like myself) who wish to gain more “business” recognition on top of the SHA’s “hospitality school” identity. In a nutshell, Cornell’s SHA very much focuses on the administration aspect and is more of a hospitality business school (somewhat against the trend of older alumnus to keep it as a hospitality school rather than a business program).

            (3) Network is key: Cornell has the best network in the industry. The well established network is happy to help further strengthen the Cornell network by hiring Cornellians. Furthermore, they inherently trust the generally “high quality” people they get out of Cornell’s program. If we interview well and look good on paper, being within the same highly regarded network bolsters confidence in hirees’ quality. There are definitely people who are not “top quality” at Cornell’s program, as will happen anywhere, but the students are generally smart, tenatious, ambitious, etc, and competitive and consequently push each other.

            So although I lack multiple perspectives and subsequently can’t give an exhaustive comparison of both and other programs, I do hope this might at least shed some light on your issue/understanding[?]

  • Tony on 01.05.2013 at 8:17 pm

    sorry, I meant not even in the Top 20- way to go! http://www.thebestschools.org/blog/2012/01/20/20-hospitality-programs-united-states/

  • Jess on 04.30.2013 at 10:45 am

    I am a Cornell Hotel School graduate who has taken a couple of classes within BU’s SHA program. The two programs simply do not compare. Cornell is an extremely challenging and competitive school. From what I have heard, UMass Amherst has a more comprehensive program. BU needs to invest significantly in the SHA program. The potential and opportunity for the program to be an international contender is there – the faculty has to make the decision to invest!

    BU doesn’t even make this ranking, where Cornell is #1.
    And also not mentioned in international rankings:

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