The Boston joint venture headed by Normandy Real Estate Partners and developers Ames Hotel Partners has taken on a new partner, New York’s boutique hotel firm, Morgans Hotel Group.
The JV is redeveloping Boston’s first skyscraper, the Ames Building, into a 115-room hotel, slated for completion towards the end of 2009.
According to a statement today, Morgans said it would commit $10 million (€6.5 million) to the JV for a 35 percent stake in the partnership. The Ames will be operated by Morgans under a long-term management contract.
New Jersey-based Normandy Real Estate Partners acquired the former office building last year, after partnering with British real estate investor Richard Kilstock, Boston developer Eamon O'Marah, and US club and restaurant owner Seth Greenberg, known collectively as Ames Hotel Partners. At the time the JV said around $40 million (€26 million) would be invested in the redevelopment of the 13-story Ames Building, built in 1889.
The total development budget is now expected to be $75 million, according to the statement.
Morgans, which has developed the boutique Morgans Hotel on Madison Avenue in New York, as well as the Delano and Shore Club in Miami, said the Ames marked its first entry into the Boston-hotel market. “A major element of Morgans’ strategy is the identification and development of new hotels in attractive, gateway cities,” said Fred Kleisner, president and chief executive officer of MHG. “Boston has been high on our list.”
David Welsh, founder and managing principal of Normandy, said the firm, based in Morristown, New Jersey, had closed on a $46.5 million development loan from UBS for the project, which would restore the Ames to “its treasured place in the city’s history.” Normandy closed its fund, Normandy Real Estate Fund, on $450 million of capital commitments in 2006.