Blackstone, a New York-based investment firm, is close to acquiring the Four Seasons hotel located at 757 Market Street in downtown San Francisco. The deal, reported by the Wall Street Journal, values the 277-room property at approximately $130 million, or $469,300 per room.
This would be Blackstone’s first hotel purchase in San Francisco in nearly ten years and comes as the city’s hospitality sector shows signs of recovery. The sale price is notably below the $181.6 million initially sought by seller Westbrook Partners when it listed the property last year. Eastdil Secured acted as the representative for Westbrook Partners in this transaction.
San Francisco’s lodging market continues to recover after several challenging years. Earlier this summer, two other New York investors—Newbond Holdings and Conversant Capital—acquired two large hotels in downtown San Francisco for $415 million. These properties, Hilton San Francisco Union Square and Parc 55 San Francisco, had almost 3,000 rooms combined and were purchased for significantly less than their 2016 appraised value. The buyers have announced plans to invest an additional $225 million into renovations.
According to CoStar data, hotel occupancy rates in the San Francisco metropolitan area reached 70 percent through September of this year, with revenue per available room (RevPAR) at $157.36. In comparison, occupancy rates were below 50 percent and RevPAR was $67.52 in 2021.
The recent improvement in business has been attributed partly to a decrease in crime rates and measures taken by Mayor Daniel Lurie to address homeless encampments. Upcoming events such as the Super Bowl in Santa Clara next February and six World Cup games scheduled for next year are also expected to increase visitor numbers across the region.
“SIGN UPThe firms plan to sink another $225 million in renovations at the properties. They acquired the Hilton San Francisco Union Square and Parc 55 San Francisco for $140,700 per key and over $1 billion less than the hotels’ 2016 appraised value.”
