The tony Rittenhouse Hotel has a new owner.
Hersha Hospitality Trust, a real estate investment trust that owns 67 hotels mostly in the Northeast Corridor, closed on a deal to buy the 111-room, five-diamond luxury hotel for $42 million Thursday, chief executive officer Jay H. Shah said.
"We're delighted with the opportunity to really transition ownership," Shah said in an interview just moments after the deal was sealed. "We're very excited about being the new era of ownership of this Philadelphia icon."
Hersha bought the hotel, which includes 152 residential condominiums, from Rittenhouse Development Corp., which developed, owned, and also managed it.
Shah said the purchase price included the hotel, about 44,000 square feet of office, restaurant, and retail leases, and a 300-space freestanding parking garage at 19th and Walnut Streets.
Opened in 1989, the hotel sits on a prime tract on West Rittenhouse Square and competes with the much bigger Four Seasons Hotel Philadelphia for affluent leisure and corporate travelers.
The Rittenhouse became known as the place where celebrities (Bruce Willis, Mick Jagger, Oprah Winfrey) and dignitaries (former President George H.W. Bush) stay when they're in town.
In early December, it was learned that Hersha was in negotiations to buy the hotel, a deal that was expected to close by New Year's Day. In mid-January, Shah said his group was still involved in due diligence and poring over financial reports.
Hersha Hospitality Management, one of three Hersha companies, will assume management of the Rittenhouse, said Shah, who controls the Hersha hotel empire with brother Neil Shah.
"Philadelphia is poised to become one of the country's top five travel destinations over the next four years," he said. "While the Rittenhouse remains a Philadelphia hospitality treasure, we believe that room exists for enhancements that will continue the hotel's exceptional reputation."
The Rittenhouse is also home to Lacroix Restaurant, Bar 210, and a full-service Adolf Biecker Spa & Salon.
"We have great confidence that Hersha will build upon the fine legacy that we created at this iconic Philadelphia hotel," David G. Marshall, president of Rittenhouse Development Corp., said in a statement.
Shah said Hersha would retain all the hotel's current associates, including longtime general manager David Benton.
Hersha Hospitality Trust owns hotels in markets including New York, Washington, Boston, Los Angeles, and Miami.