Two of San Francisco’s Largest Hotels Sell to Unnamed Buyer

Two of the largest hotels in San Francisco are about to come under new ownership.

The sale of the Hilton Union Square and Parc 55 hotels to an unidentified buyer is expected to close soon as a “purchase and sale agreement has been signed,” the San Francisco Chronicle reported, citing a San Francisco Superior Court filing. Hilton Union Square is the city’s largest hotel with 1,921 rooms, while the Parc 55, a Hilton property, is among the top five with 1,024 rooms, according to the San Francisco Business Times.

Hilton Union Square at 333 O’Farrell Street and Parc 55 at 55 Cyril Magnin Street, both in the Union Square neighborhood, were previously owned by Park Hotels & Resorts, an affiliate of Hilton Worldwide Holdings. Park defaulted on its $725 million mortgage on the properties in 2023.

A previous court order set a deadline of July 29 for the sale but no deal materialized. On Aug. 6, a judge approved a request to extend a court-appointed receiver’s ability to sell the properties until Oct. 29, marking the fourth time the sale deadline has been extended.

The receiver, Michelle Russo of Hotel Asset Value Enhancement, has been looking to sell the two properties for nearly two years on behalf of Wilmington Trust, a trustee for special servicer Wells Fargo. An attorney for Russo declined to comment on the identity of the buyer to the Chronicle but said a motion to approve the sale will be filed “soon.”

Several hotels across the Bay Area have suffered financial setbacks in the years since the pandemic’s outbreak. Many properties in the East Bay and South Bay, as well as San Francisco itself, have fallen into loan defaults and foreclosure proceedings over the past year.

Hotel sales in general in California declined 7.4 percent in the first half of the year from the same period the year prior, according to Atlas Hospitality Group. In the Bay Area, the largest hotel sales in Alameda County and Santa Clara County in the first six months of the year were foreclosure sales.

Last month, the 500-room Oakland Marriott City Center, a 500-room hotel was taken back by lender Invesco in a foreclosure proceeding that valued the building at $70.2 million. In May, BrightSpire Capital seized the 541-room Signia by Hilton in downtown San Jose in a foreclosure that valued the property at $80 million.

— Chris Malone Méndez