LaSalle Hotel Properties Acquires Westin Market Street in San Francisco for $350M

BETHESDA, MD—LaSalle Hotel Properties acquired The Westin Market Street in San Francisco for $350 million. The company funded the acquisition with cash on hand and borrowings from its senior unsecured credit facility.

At closing, the company renamed the hotel Park Central San Francisco. Highgate Hotels will continue to manage the asset as an independent hotel on behalf of the company. Highgate Hotels also manages Park Central and WestHouse in Manhattan and Southernmost Hotel Collection in Key West on behalf of the company.

The 681-room hotel is centrally located at 50 Third St., near Market St., which bisects San Francisco between the SoMa District and the Financial District. Destinations in SoMa include the neighboring Moscone Convention Center, the Yerba Buena Gardens, the Yerba Buena Center for the Arts (within two blocks of the hotel), AT&T Park and office headquarters for companies such as Twitter, Instagram and Pinterest.

“We are thrilled to have acquired this prominent hotel with such a fantastic location,” stated Michael D. Barnello, president and CEO of LaSalle Hotel Properties. “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% of our EBITDA is now generated in San Francisco.”

The hotel was constructed in 1984 and underwent a comprehensive $28.3-million renovation in 2007. The asset has been well maintained since, according to the company, with $14 million invested from 2009 to present. The company is planning to commence a normal life-cycle renovation in the fourth quarter of 2016.

The hotel’s 681 guestrooms average 347 sq. ft. The property has 23,000 sq. ft. of flexible meeting and event space, including a 9,000 sq.-ft. ballroom with capacity of up to 1,200 guests. MaSo, the hotel’s only dining outlet, offers locally-sourced cuisine, an outdoor terrace and can host private events for up to 300 guests.

The Park Central San Francisco was purchased fee simple.

The potential hotel acquisition the company previously disclosed to be under contract in Los Angeles is no longer under contract.