SAN FRANCISCO — The JW Marriott San Francisco Union Square hotel has traded between two hospitality REITs. Thayer Lodging Group purchased the property from Ashford Hospitality Trust in an all-cash deal for $96 million, at a 3.7 percent capitalization rate.
Built in 1987 and recently renovated, the JW Marriott is located at the corner of Post and Mason streets in the city's upscale Union Square neighborhood. The AAA, four-diamond property contains 337 guestrooms, including eight suites, over 21 stories. It features 14,000 square feet of meeting space including a 4,350-square-foot ballroom and a conference center. It also contains the restaurant California and the bar Eclectic. The hotel operates under a ground lease that expires in 2083.
“The San Francisco lodging market is rebounding strongly and there is upside to the operating performance,” said O'Connor, a senior director with the Los Angeles office of Cushman & Wakefield Sonnenblick Goldman, which represented Ashford in the deal. “The offering appealed to a wide spectrum of international hotel investors given its recent comprehensive renovation, high-end market positioning, superior location and extremely high barriers to entry in this gateway market.”
Ashford Hospitality Trust plans to use the proceeds from the sale to pay down a $47.5 million loan on the hotel that was set to mature in 2013. It will also use the proceeds to reduce borrowings on its credit facility and increase liquidity. As of year-end 2010, the REIT controlled 97 properties totaling 20,458 rooms.
Annapolis, Md.-based Thayer Lodging Group primarily owns properties in the Eastern United States, especially Florida. It also has holdings in Maryland, Massachusetts, Virginia and Illinois. The company's portfolio prior to this purchase totaled 15 hotels and 3,391 rooms.
— Coleman Wood