Regions
West | San Francisco
Jul 08, 2009
By: Barbra Murray, Contributing Editor
The current economy, plagued by job losses galore and belt-tightening on the business and leisure travel fronts, has been more than unkind to the hospitality industry, to say the least. Despite the inhospitable climate, Starwood Hotels & Resorts has nabbed a buyer for its W San Francisco hotel. Keck Seng Investments (Hong Kong) Limited has agreed to fork over $90 million for the 404-room property.
Located at 181 Third St. in San Francisco's South of Market (SoMa) District, W San Francisco is a 31-story structure designed by the architectural firm of Hornberger & Worstell. The property was developed by Starwood in 1999 for a reported $79.4 million according to real estate services firm Jones Lang LaSalle's 2003 San Francisco Lodging Investment Review.
The deal with Keck Seng, which already owns three Starwood properties, includes a long-term management agreement that allows Starwood to continue to operate the hotel under the W flag. If all goes as planned, the transaction will close on July 30. Starwood has instituted a disposition program to pay down debt, and the sale of W San Francisco is part of that plan.
Today, with the credit crunch and dismal hospitality sector statistics, finding a buyer for a hotel in any market is a challenge. As per a second quarter report by Marcus & Millichap Real Estate Investment Services, transactions have decreased over 40 percent over the last 12 months. That's the general situation in the U.S., however, judging by recent activities in San Francisco, hoteliers appear to be banking on a turnaround sooner rather than later. Last month, the century-old Westin St. Francis completed a $40 million renovation, and the Parc 55 Hotel wrapped up a $30 million upgrade. Additionally, Personality Hotels debuted the Hotel Frank and Hotel Vertigo following transformations costing $10 million and $5 million, respectively.
By: Barbra Murray, Contributing Editor
The current economy, plagued by job losses galore and belt-tightening on the business and leisure travel fronts, has been more than unkind to the hospitality industry, to say the least. Despite the inhospitable climate, Starwood Hotels & Resorts has nabbed a buyer for its W San Francisco hotel. Keck Seng Investments (Hong Kong) Limited has agreed to fork over $90 million for the 404-room property.
Located at 181 Third St. in San Francisco's South of Market (SoMa) District, W San Francisco is a 31-story structure designed by the architectural firm of Hornberger & Worstell. The property was developed by Starwood in 1999 for a reported $79.4 million according to real estate services firm Jones Lang LaSalle's 2003 San Francisco Lodging Investment Review.
The deal with Keck Seng, which already owns three Starwood properties, includes a long-term management agreement that allows Starwood to continue to operate the hotel under the W flag. If all goes as planned, the transaction will close on July 30. Starwood has instituted a disposition program to pay down debt, and the sale of W San Francisco is part of that plan.
Today, with the credit crunch and dismal hospitality sector statistics, finding a buyer for a hotel in any market is a challenge. As per a second quarter report by Marcus & Millichap Real Estate Investment Services, transactions have decreased over 40 percent over the last 12 months. That's the general situation in the U.S., however, judging by recent activities in San Francisco, hoteliers appear to be banking on a turnaround sooner rather than later. Last month, the century-old Westin St. Francis completed a $40 million renovation, and the Parc 55 Hotel wrapped up a $30 million upgrade. Additionally, Personality Hotels debuted the Hotel Frank and Hotel Vertigo following transformations costing $10 million and $5 million, respectively.
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