The asking price is $10.5 million, which represents $456,522 a room. Gordon Allred, a senior director and hotel specialist in Marcus & Millichap's Ontario office; Jeff Rake an investment specialist in the firm's Philadelphia office, and Andrew Janick, an associate in this office, have the listing.
The connected buildings, located at 1715 Rittenhouse Square St., date back to 1906. Rake tells GlobeSt.com the largest, a double-size mansion, was formerly a bed and breakfast. Later the owner acquired buildings on either side and converted the property into a boutique hotel.
Rake also says it has expansion potential. "A fourth building next to it is up for sale, which a buyer could acquire to add rooms." In addition, he says, "despite its historic status, there's potential to add two stories to the buildings without variances, which could add between 10 and 15 more rooms."
According to July data from the local office of PKF consulting, the occupancy rate at Center City hotels reached 83% by mid-summer, up 5% from a year ago. The overall average daily room rate of downtown hotels rose 8%.
Citing its proximity to Rittenhouse Square, Janick says, "the intrinsic and residual value of Rittenhouse Square real estate combines with the continued improvement of the hotel's location and its expansion potential. In addition to a profitable hotel operation, the appreciation of the property alone would likely provide substantial return after a reasonable hold period."
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