San Francisco’s 2 Largest Hotels Lose More Than $1 Billion in Value (2024)

Skift Take

San Francisco’s two largest hotels have lost over $1 billion in value, now worth $553.8 million, prompting a downgrade in bond ratings and a rush to sell before foreclosure.

TheDJIAwas up 162,Nasdaqrose 149 points, theS&P 500was up 34 and the 10 year treasury yield was down .04 to 4.44%. While lodging stocks did better than yesterday, they still did not keep up with the rising indexes and wound up mixed on the day.

Hiltonhas been approved to build a new four-story hotel inEscambia County, Florida, which will mark the local debut of its new extended-stay hotels brand.Hiltonwas approved to build a new hotel with over 58,000 square feet of space and 121 rooms. The hotel, calledLivSmart Studios by Hilton, will be located onPlantation RoadandUniversity Office BoulevardinPensacola.

TheHampton Inn by HiltoninBridgeport, West Virginiaheld a ribbon-cutting ceremony marking the completion of a year-long, $4.5 million renovation. Each floor of the hotel received cosmetic changes from carpets to furniture. The indoor pool area has new flooring and the fitness center was expanded with all new equipment.

A pair of investment firms have injected $35 million into a 350-key hotel inChicago, Illinoisto stave off foreclosure.1907 CapitalandCrestline Investorstook a leading equity stake in the dual-bandCanopy by HiltonandHilton Garden InnonWest Jackson Boulevard. The investment helped pay off a $100.5 million mortgage originally taken by a venture ofPhoenix Development PartnersandGreen Door Capital Investment, which spent $148 million to convert the historic 14-story building into a hotel.PhoenixandGreen Doorhad been seeking new equity to settle their debt, as their lender, a venture ofGoldman Sachs, threatened to foreclose on the property.1907andCrestlinesaw potential in the dual-brandHiltonhotel and stepped in to rescuePhoenixandGreen Door.1907andCrestlinetook out a $65 million mortgage fromCitigroupto finalize the recapitalization. Despite the equity shift,PhoenixandGreen Doorremain partners in the hotel’s ownership.

New research estimatesSan Francisco’stwo largest hotels have lost more than $1 billion in value as the city’s hotel market recovery continues to lag the rest of the country. The nearly 3,000-room hotel complex consisting of theHilton San Francisco Union SquareandParc 55hotels were valued at just $553.8 million byKroll Bond Rating Agency, representing a 65% drop from the hotels’ 2016 appraisal of $1.56 billion that underpinned a $725 million mortgage from then-ownerPark Hotels & Resorts. Last week,Moody’s Investors Servicedowngraded each of the deal’s bond classes. The original class A bonds were downgraded to Baa1. Bondholder reports also revealEastdil Securedhas been tapped by the loan’s special servicer,Wells Fargo Bank, to sell both properties: the 1,919-roomHilton San Francisco Union Squareand the 1,024-roomHilton Parc 55.Eastdil Securedsigned a listing agreement in late April and began preparing an offering memorandum. Per the terms of receivership, the receiver has until Sept. 1 to find an adequate buyer for both properties, or the properties will go into no judicial foreclosure.

Certares Management LLChas acquired theCourtyard San Diego Downtown. The hotel is a recently renovated lifestyleMarriottasset located inDowntown San Diego, California. The 245-room historic hotel marks the first hotel acquisition withHHM, who has operated the hotel for over a decade.

Downtown Mankato, Minnesotamight be getting two new hotels built, adding over 280 rooms to the city’s lodging capacity. The developer, known asHotel Mankato LLC, plans to seekCity Councilapprovals in August for a four-story, 126-roomElement by Westinand a 10-story, 156-keyAC by Marriott. The two hotels will share a development site where theLandmark CenterandCity Center Hotelcurrently stand. Currently, the project is described as a 250,000-square-foot development with a 168-stall underground parking garage. The hotels would also share a pool, fitness center and lounge spaces. Plans also mention space for a future coffee shop at the main level and a third-party restaurant with rooftop patio space on the 10th story.

IHG Hotels & Resortsannounced the opening of a newStaybridge Suiteshotel inManteca, California. The new hotel offers more than 910 square feet of meeting space.Staybridge Suites Mantecais owned and operated byNor Cal Hospitality Solutions Inc.

SH Hotels & Resortsannounced plans to unveil1 Hotel & Homes San Miguel de Allende. Set to open in 2027 in the heart of historicMexico, just minutes away from the vibrant city center ofSan Miguel de Allende,1 Hotel & Homes San Miguel de Allendewill feature approximately 97 keys and 48 residences, extensive culinary offerings and outdoor event space.

Disney Vacation Clubhas officially welcomed its first guests to the newly designed cabins atDisney’s Fort Wilderness ResortinLake Buena Vista, Florida.The Cabins at Disney’s Fort Wilderness Resortwill open in phases throughout the year and eventually consist of more than 350 new cabins. The cabins are a part of a collection of improvement projects underway at the resort.

The historicBell BuildinginAthens, Georgia, is undergoing renovations to become an exclusive boutique hotel. Built in 1916, theBell Hotelwill feature 12 elegantly appointed rooms upon completion of renovations and enhancements later this year. The project is owned by theFoster Family, who purchased the property in 2022. The hotel will offer a new rooftop terrace, an intimate bar in the reception area as well as versatile private event offerings. The grand opening of theBell Hotelis currently on track for Fall 2024.

A new developer announced his intention to move forward with the long-delayedTalus La Quintaresort development.Christopher M. George, founder ofCMG Financial, a mortgage bank, announced he has exercised his rights to proceed under the terms of last month’s Memorandum of Understanding and Agreement with theCity of La Quinta, Californiaand other involved parties. The move will giveGeorgeadditional time to conduct a thorough investigation into the viability of documenting and advancing the long-delayedTalusproject.Talus La Quintais a resort destination that is planned to include two hotels, single-family homes, condominiums, a golf clubhouse, a conference center and a luxury spa. The project, initially known as theSilverRock Resort, was first envisioned in 2002. It has faced numerous delays, and in September 2022, construction on the project came to a halt.

Europe Highlight

Radisson Hotel Groupannounced the opening ofRadisson Blu Hotel SheffieldinSheffield, UK. The hotel offers 154 guestrooms, a rooftop speakeasy-style Indian restaurant concept and bar, six flexible meeting and event spaces with an outdoor terrace and a fitness center.

July 2nd, 2024 at 5:01 PM EDT

Companies: 1 Hotels, AC Hotels by Marriott, Canopy by Hilton, Certares, Courtyard by Marriott, Crestline Investors, Disney Parks, Eastdil Secured, Element, Hampton by Hilton, HHM Hospitality, Hilton, Hilton Garden Inn, , La Quinta, LivSmart Studios, Park Hotels and Resorts Inc., Radisson Blu, Radisson Hotel Group, , Staybridge Suites

Locations: California, England, Georgia, Mexico, Minnesota, Palm Springs, Phoenix, San Francisco, West Virginia