Hodges Ward Elliott (“HWE”) is pleased to offer on an exclusive basis the leasehold interest in the Sheraton Philadelphia Downtown, a 762-room hotel on 2.1 acres. The property is the second largest hotel in Philadelphia and has meeting space totaling 60,406 square feet (including a 20,000 square foot ballroom), two food and beverage outlets, and fitness center. Originally constructed in 1980, the property recently underwent an extensive renovation. Current ownership has spent over $37 million to update the guest rooms and address deferred maintenance, and has invested an additional $2.6 million this year to renovate and enhance the Property's meeting and pre-function spaces. At 762 rooms the Sheraton offers attractive economies of scale and operating efficiencies for increased profitability. The Sheraton Philadelphia Downtown presents an opportunity to invest in one of America’s foremost markets at an exceptional discount to replacement cost.
| ADDRESS: | |
| Stories: | 29 |
| Rooms: | 762 (Including 21 Suites) |
| YEAR OPENED: | 1980 |
| Year Renovated: | 2020 ($36.2M or $47,530 per key) |
| Submarket: | Philadelphia CBD |
| Market: | Philadelphia |
| Brand: | Sheraton by Marriott |
| Scale: | Upper Upscale |
| Gross Building Area: | 795,319 SF |
| F&B Outlets: |
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| MEETING SPACE: | 60,406 SF (across 24 flexible rooms) |
| Other Amenities: |
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| Parking: |
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| Tripadvisor Ranking: | #21 of 97 Hotels in Philadelphia |
| INTEREST CONVEYED: | Leasehold (expires 2118 with a Purchase Option in 2052) |
| Affiliation: | Marriott International |
| Management: | Aimbridge Hospitality |
| Labor: | Union |
Investment Highlights
Strategic Location in the Heart of the Center City
Situated along 17th Street, between Race and Vine Street, the Hotel occupies an irreplaceable location in the heart of Center City - Philadelphia’s fastest growing submarket - within one mile of over 65 million SF of office space and within close proximity to the city’s top leisure attractions including City Hall, Independence Hall and the Philadelphia Museum of Art. The Hotel is also located less than two blocks from the Philadelphia Convention Center (the city’s largest driver of lodging demand; 581,612 room nights in 2024), which regularly hosts more than 250 events and one million attendees annually.
Abundant, Best-In-Class Meeting and Event Space
The Sheraton offers an impressive 60,000+ SF of event space across 24 rooms, including the expansive 20,000 SF Liberty Ballroom. Its prime location, just two blocks from the Pennsylvania Convention Center—which experienced a significant 67.4% increase in economic impact in 2024—positions the Property to attract a rising number of corporate and private events returning to the city.
Favorable Ground Lease
The ground lease has 92 years remaining. Terms are favorable and easy to underwrite, with rent increasing at a fixed 2% per year with no CPI or fair market resets. The leasehold owner has an option to buy the ground in 2052 at a fixed price of $69.5 million ($91,000 per room). These are some of the most secure, predictable, and favorable leasehold terms in the market today, making the asset straightforward to underwrite.
Discount to Replacement
At anticipated pricing, the Sheraton Philadelphia Downtown is expected to trade at implied fee simple equivalent pricing of less than a quarter of replacement cost.
ROI Opportunities
The Sheraton has several large closed or underutilized spaces that could be reopened or repositioned. The shuttered pool area could be repurposed or reopened. The closed basketball gym could be reconfigured as a pickleball or padel club. The 4,000 square-foot Horizons Rooftop meeting space could be redone as a rooftop lounge and restaurant. The site also has unused FAR that could one day be used to build a tower above the convention space.
Institutional, Renovated Asset with Best-In-Class Room Product
A comprehensive $36.2 million ($47,530/key) renovation was completed in April 2020. Approximately $31.2 million ($41,000/key) was allocated toward a full overhaul of the guest rooms and corridors, including the replacement of all case goods and soft goods and the conversion of 240 bathtubs to walk-in showers. Building on this investment, ownership has deployed an additional $2.6 million in 2026 to renovate the meeting and pre-function spaces, enhancing the guest experience and driving incremental group and banquet demand. Ownership has also identified a forward-looking capital improvement plan focused on the lobby and public areas, positioning the Property for improved competitiveness and long-term performance.
Premier Convention Destination
Located just two blocks from the Property, the Pennsylvania Convention Center offers over 2.0 million square feet of function space and serves as a major driver of citywide demand. In 2024, the Convention Center generated approximately 581,612 room nights, reinforcing Center City Philadelphia’s position as a leading national meetings and events destination. Ongoing convention activity supports strong midweek and shoulder-period occupancy while driving meaningful compression across the submarket during large-scale citywide events.
Loaded Roster of Demand Generating Events
The Power of Marriott & the Sheraton Brand
Marriott International is the leader in global hospitality with a portfolio of 30 brands in 143 countries across 9,700+ properties and over 1.6 million rooms as well as a loyal following of 237 million Marriott Bonvoy Members. Marriott emphasizes a franchise model that facilitates rapid expansion and local market expertise, with a portfolio that includes well-known brands such as Ritz-Carlton, W Hotels, St Regis, and Sheraton, catering to various market segments from luxury to budget-conscious travelers.
Sheraton Hotel, a flagship brand of Marriott International, caters to business and leisure travelers globally. With over 430 hotels in more than 70 countries, Sheraton is renowned for its high-quality accommodations and amenities. As the most global brand within Marriott’s portfolio, Sheraton caters to business and leisure needs by blending design and functionality for discerning travelers worldwide. Research indicates Sheraton ranks 1st or 2nd in brand awareness among Marriott International’s full service brands.
