Westbrook Partners puts Four Seasons San Francisco up for sale

Investment firm poised to lose another Four Seasons hotel in the city via mortgage sale

Westbrook Partners puts Four Seasons San Francisco up for sale
757 Market Street (Google Maps, Getty)

Westbrook Partners wants to sell the Four Seasons San Francisco weeks after it was poised to lose the similarly named Four Seasons San Francisco at Embarcadero.

The Florida-based investor led by Paul Kazilionis has listed the 227-room Four Seasons San Francisco hotel at 757 Market Street, in South of Market, the San Francisco Business Times reported

An asking price was not officially disclosed, but an unidentified source told the newspaper Westbrook seeks $181.6 million, or $800,000 per room.

The listing by Eastdil Secured comes weeks after Waterfall Asset Management put a $72.5 million mortgage loan on the Four Seasons San Francisco at Embarcadero up for sale after Westbrook quit making payments on that property. A potential buyer of the troubled loan could then acquire the 155-room luxury hotel at 222 Sansome Street, in the Financial District.

Now both of Westbrook’s Four Seasons properties in Downtown San Francisco are up grabs, according to the Business Times.

Several wealthy investors based in Asia have been looking to buy the Four Seasons San Francisco on Market Street, the unidentified source said.

Westbrook bought a controlling interest in the Four Seasons San Francisco in 2010, paying $35 million to help then owner Millennium Partners pay down a $90 million mortgage loan and keep a third-interest in the hotel.

The investment firm is also the owner of the Four Seasons Private Residences, a 146-unit luxury condo highrise at 706 Mission Street.

Westbrook bought the Four Seasons San Francisco at Embarcadero, once known as the Mandarin Oriental San Francisco, in 2019 for $126.6 million, or $816,000 per room. Three years later, the firm sank $32.1 million more in renovations.

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In December, Westbrook stopped making payments on the loan, according to JLL, which has the listing. In early March, Waterfall served Westbrook Partners with a notice of default.

The two Four Seasons properties come to market at a difficult time for the San Francisco hospitality sector.

The value of the city’s largest hotels has dropped between 10 and 15 percent year-over-year because of rising insurance rates and a slow recovery of “key hospitality segments,” industry observers told the Business Times. 

A rebound of San Francisco hotel business to levels before the pandemic isn’t expected until 2030.

The city’s two largest hotels, the Hilton San Francisco Union Square and Parc 55, are in receivership after Park Hotels walked away from a maturing mortgage last year. The court-appointed receiver has until Sept. 1 to find a buyer, or the properties will head into nonjudicial foreclosure, according to the Business Times.

In January, Los Angeles-based Portsmouth Square defaulted on a $97 million loan tied to the 544-room Hilton San Francisco Financial District hotel at 750 Kearny Street. The investor, now seeking refinancing, could be forced to sell.

At the same time, New York-based RFR Holding has tried to sell the 459-room Hotel Whitcomb at 1231 Market Street for more than 40 percent less than it bought if for in 2018.

— Dana Bartholomew

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