Newton REIT buys Sonesta in $174m deal

The deal is expected to be finalized next year.

Sonesta, a family-owned business started by Boston realtor and financier A.M. Sonnabend in the 1940s, entered into talks with Hospitality Properties Trust while it was looking to expand the brand in the United States. The original idea was to partner with a company that owned hotels Sonesta could operate, but the faltering economy made that plan less feasible. By becoming part of the trust, Sonesta could manage existing hotels in the firm’s portfolio, or new ones as they are added, company officials said.

“It was very difficult for us to expand because there were very few hotel transactions happening,’’ said Stephanie Sonnabend, chief executive of Sonesta and granddaughter of its founder.

Hospitality Properties Trust has invested $6.8 billion in 288 hotels and 185 travel centers in North America, including 13 Courtyard, Candlewood Suites, Staybridge Suites, and Residence Inn properties in Eastern Massachusetts.

“I’m pleased to be adding another management team that HPT could do business with,’’ said Tim Bonang, vice president of investor relations for Hospitality Properties Trust. “They’ve got a high-quality reputation for high-quality accommodations and guest services, and the new brand would give HPT flexibility as it looks to make acquisitions.’’

The Royal Sonesta Boston (located in East Cambridge) will become Hospitality Properties Trust’s first hotel in the Boston market, and one of only a handful of full-service properties it owns - those that feature restaurants, valet parking, and other amenities.

The deal to buy Sonesta comes as the hotel industry is rebounding. For the past year, occupancy and room rates nationwide have been rising, after suffering steep declines in 2008 and 2009.

Last year, Boston was one of nine US markets to match or surpass its 12-year average occupancy rate of 67.3 percent, according to PKF Consulting USA, a hotel consulting firm . Occupancy rates in Greater Boston are expected level off in the next few years, but revenues per available room should keep rising for the next five years, said Andrea Foster, vice president of PKF Consulting in Boston.

“This [acquisition] appears to be good strategic positioning in the Boston-Cambridge market, where performance and pace is strong and the supply pipeline is limited in the foreseeable future,’’ Foster said.

The Sonnabend family currently owns more than 55 percent of Sonesta shares, and seven family members help run the company, including four who serve on the board of directors.

Selling the family business was a tough decision, Stephanie Sonnabend said, but she is optimistic about the future. Becoming part of a larger company paves the way for Sonesta to manage even more hotels, she said.

“This is a great opportunity to grow the Sonesta brand.’’

Katie Johnston can be reached at kjohnston@globe.com. Follow her on Twitter @ktkjohnston.

SONESTA INTERNATIONAL HOTELS CORP.
Headquarters Copley Square, Boston
Employees worldwide 3,000
Hotels and cruise ships 33
Notable properties: