LaSalle Hotel Properties (LHO) today announced that it acquired The Westin Market Street in San Francisco, California for $350.0 million. The Company funded the acquisition with cash on hand and borrowings from its senior unsecured credit facility.
At closing, the Company renamed the hotel Park Central San Francisco. Highgate Hotels will continue to manage the asset as an independent hotel on behalf of the Company. Highgate Hotels also manages Park Central and WestHouse in Manhattan and Southernmost Hotel Collection in Key West on behalf of the Company. The 681-room hotel is centrally located at 50 Third Street, just steps from Market Street, which bisects San Francisco between the SoMa District and the Financial District. SoMa is a highly diversified submarket, including the neighboring Moscone Convention Center, the Yerba Buena Gardens, the Yerba Buena Center for the Arts (within two blocks of the hotel), AT&T Park and office headquarters for companies such as Twitter, Instagram and Pinterest. In addition to numerous nearby office towers, retail outlets and restaurants, guests benefit from the hotel’s convenient location three blocks from Union Square.
“We are thrilled to have acquired this prominent hotel with such a fantastic location” said Michael D. Barnello, President and Chief Executive Officer of LaSalle Hotel Properties. “The San Francisco lodging market remains very strong, with demand at peak levels and limited supply growth on the horizon, and we are excited about increasing our presence in San Francisco for the second time within 10 months – marking our seventh hotel in the city. Approximately 17% of our EBITDA is now generated in San Francisco.”
“Park Central San Francisco represents an excellent opportunity to expand our relationship with Highgate Hotels and capitalize on cross-selling initiatives with the Park Central in Manhattan.”
The hotel was constructed in 1984 and underwent a comprehensive $28.3 million renovation in 2007. The asset has been well maintained since, with $14.0 million invested from 2009 to present. The Company is planning to commence a normal life-cycle renovation in the fourth quarter of 2016.
The hotel’s 681 guestrooms average 347 square feet. The property has 23,000 square feet of flexible meeting and event space, including a 9,000 square-foot ballroom with capacity of up to 1,200 guests. MaSo, the hotel’s only dining outlet, offers locally-sourced cuisine, an outdoor terrace and can host private events for up to 300 guests.
The Park Central San Francisco was purchased fee simple.
The potential hotel acquisition the Company previously disclosed to be under contract in Los Angeles is no longer under contract.
LaSalle Hotel Properties is a leading multi-operator real estate investment trust. The Company owns 46 hotels. The properties are upscale, full-service hotels, totaling more than 11,900 guest rooms in 14 markets in ten states and the District of Columbia. The Company focuses on owning, redeveloping and repositioning upscale, full-service hotels located in urban, resort and convention markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier lodging companies, including Westin Hotels and Resorts, Hilton Hotels Corporation, Outrigger Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, White Lodging Services Corporation, Commune Hotels and Resorts, Davidson Hotel Company, Denihan Hospitality Group, the Kimpton Hotel & Restaurant Group, LLC, Accor, Destination Hotels & Resorts, HEI Hotels & Resorts, JRK Hotel Group, Inc., Viceroy Hotel Group, Highgate Hotels and Access Hotels & Resorts.