SAN FRANCISCO — LaSalle Hotel Properties (NYSE: LHO) has purchased The Westin Market Street hotel in San Francisco for $350 million. At closing, LaSalle renamed the hotel Park Central San Francisco.
LaSalle funded the purchase with cash on hand and borrowings from its senior unsecured credit facility.
“We are thrilled to have acquired this prominent hotel with such a fantastic location,” says Michael Barnello, president and CEO of LaSalle. “The San Francisco lodging market remains very strong, with demand at peak levels and limited supply growth on the horizon, and we are excited about increasing our presence in San Francisco for the second time within 10 months — marking our seventh hotel in the city. Approximately 17 percent of our EBITDA is now generated in San Francisco.”
Highgate Hotels will continue to manage the property as an independent hotel on behalf of LaSalle.
The 681-room Park Central San Francisco is located in the SoMa District, which includes the Moscone Convention Center, the Yerba Buena Gardens, the Yerba Buena Center for the Arts, AT&T Park and headquarters for companies such as Twitter, Instagram and Pinterest. The hotel is also located three blocks from Union Square, an iconic plaza and upscale shopping district.
The hotel was constructed in 1984 and underwent a $28 million comprehensive renovation in 2007. The property has had $14 million invested into it from 2009 to present. LaSalle will begin a renovation of the hotel in the fourth quarter of 2016.
The 681 guestrooms in Park Central San Francisco average 347 square feet. The property has 23,000 square feet of flexible meeting and event space, including a 9,000-square-foot ballroom with a capacity of up to 1,200 people. MaSo, the hotel’s only dining facility, offers locally sourced cuisine, an outdoor terrace and can host private events for up to 300 people.
LaSalle Hotel Properties is a multi-operator REIT that owns 46 upscale, full-service hotels, with nearly 12,000 rooms in 14 U.S. markets.
LaSalle’s stock price closed at $42.95 per share on Monday, Jan. 26, up from $30.90 per share a year ago.
— Scott Reid