The 230-room Hyatt Place San Francisco Downtown may have cost more than initially thought.
Instead of the previously reported $105.9 million, Dynamic Capital actually paid $142 million for the property when furniture and fixtures are included, a source with direct knowledge of the deal told the San Francisco Business Times.
That comes to a little more than $617,000 per room, a record per-key price for a hotel in the city since the beginning of the pandemic in March 2020.
The previous record in the Covid era was the approximately $615,000-per-room sale of the 360-room Le Meridien San Francisco in September. The total deal cost KHP Capital Partners $221.5 million.
Neither Dynamic nor Stonebridge Cos., the seller of the Hyatt Place property, has disclosed the official purchase price. According to the San Francisco Business Times, several members of the CBRE team that represented the sellers have said on LinkedIn that the Hyatt Place price beats the current pandemic-era record.
The transfer tax suggested that the property sold for $105.9 million, $36.1 million less than the actual sales price. That additional value represents various hotel assets that aren’t the building or land. Furniture, fixtures and equipment are often included in this number, as well as any “goodwill costs,” which is the intangible value of the brand and operator.
Allocations for furniture and goodwill are rarely this large, Alan Reay, president of Irvine-based Atlas Hospitality, told the Times. Valuing the property at the lower cost, instead of including the value of the other assets, saves the buyer and seller about $1.8 million in transfer tax. According to Reay, it’s typically quite difficult to get both buyers and sellers to agree on such a high value for those assets.
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San Francisco
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