San Francisco Four Seasons Sells to Blackstone

Blackstone is nearing the acquisition of the Four Seasons hotel in downtown San Francisco.

The New York-based investment firm plans to buy the 277-key lodging at 757 Market Street for about $130 million, the Wall Street Journal reported. That price amounts to $469,300 per key.

The transaction would mark Blackstone’s first hotel purchase in San Francisco in about a decade and highlights its commitment to the luxury hotel market amid the economic recovery in San Francisco.

The price is well under the $181.6 million that seller Westbrook Partners was asking when it listed the property last year. Eastdil Secured represented the seller in the transaction.

The lodging market in San Francisco — and the Bay Area at large — still has a long way to go.

Over the summer, two other New York investors, Newbond Holdings and Conversant Capital, spent $415 million for two long-distressed hotels in downtown San Francisco with almost 3,000 keys.

The 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.

In the first nine months of the year,

The hotel occupancy rate in the San Francisco metro climbed up to 70 percent with revenue per available room at $157.36 through September this year, according to CoStar. By contrast, in 2021, as tourists and business travelers shied away from the city amid crime and quality-of-life issues, hotel occupancy was below 50 percent and RevPAR was $67.52.

The business is on the up-and-up thanks in part to the city’s falling crime rate and Mayor Daniel Lurie’s crackdown on homeless encampments. The forthcoming Super Bowl in Santa Clara in February and six World Cup games next year is expected to draw a surge of visitors to the region.

— Chris Malone Méndez