DALLAS—Ashford Hospitality Prime Inc. has reached terms with Marriott to convert its Courtyard San Francisco Downtown hotel to an Autograph Collection property. The company has also listed the Renaissance Tampa for sale and has engaged The Plasencia Group to market the property to potential buyers. This brings a conclusion to determining the company’s strategy for its non-core hotels.
The agreement with Marriott calls for the Courtyard San Francisco to be converted to an Autograph hotel by December 2019 pursuant to a conversion PIP, which is currently estimated to be approximately $30 million (incremental to capital projects already underway) and consists of updates to the guestrooms, guest bathrooms, corridors, building facade, lobby, restaurant and meeting space. Marriott will continue to manage the property after the conversion under a management agreement.
The company believes that post-conversion, the new Autograph property should realize a $50 RevPAR premium to the current Courtyard hotel and that its incremental $30-million investment should yield an approximate 20% unlevered internal rate of return.
“The conversion of the Courtyard San Francisco to an Autograph Collection property will better align the property with our strategy of owning luxury hotels and resorts. With a highly desirable location in the heart of downtown San Francisco and within close proximity to the Moscone Convention Center, the upbranded property will operate in a desirable segment of the San Francisco market,” said Richard J. Stockton, Ashford Prime’s president and CEO. “This transaction, along with the upbranding of the Courtyard Philadelphia as well as our recent announcement of the sale of the Plano Marriott and the listing for sale of the Tampa Renaissance, bring a conclusion to finalizing the strategy for our non-core hotels.”