We’re just now learning the sale price of a hotel deal that happened three months ago, and SF’s largest hotel, the Hilton Union Square, plus the also-very-large Parc55, sold for $408 million, though they’d been worth $1.5 billion in 2016.
The SF Union Square hospitality industry was already in the dumps in mid-2023 when the city's largest hotel, the Hilton Union Square (333 O’Farrell Street), and the city’s fourth-largest Parc 55 hotel (55 Cyril Magnin Street), saw their owners default on a $723 million mortgage and abandon the properties. Both hotels then operated in limbo for more than two years, until September of this year, when NY-based luxury hotel operators Newbond Holdings and real estate lenders Conversant Capital stepped up and bought both hotels.
But the sale price had been redacted from the legal sale documents. Now, three months later, the SF Business Times reports that the sale price was actually $408 million for both hotels. The Business Times refers to this as the “biggest hotel deal of the year,” which of course it was, because it involves SF’s largest and fourth-largest hotels — which together account for 10% of all hotel rooms available in the city.
Though in dollar amounts, this is another fire-sale deal. As the Business Times points out, the combined properties were appraised in 2016 at a value of more than $1.5 billion, and sold for less than a third of that, at $408 million.
Either way, the downtown SF hospitality scene appears to be going in a positive direction again. Just last week, the Wall Street Journal broke the news that a firm was buying the Four Seasons at 757 Market Street for $130 million.
Newbond founding partner Vann Avedisian struck an optimistic note in a statement when the deal price on the Hilton and Parc55 became public. "These hotels, anchored in the heart of Union Square and backed by Hilton’s strong global brand, are uniquely positioned to benefit from San Francisco’s resurgence as a leading global destination, which is well underway thanks to Daniel Lurie’s leadership," Avedisian said in a statement to the Business Times. "That leadership was essential to us in making the investment.”
As you can tell by Avedisian’s choice of words about “backed by Hilton’s strong global brand,” the Hilton Union Square will probably remain named Hilton Union Square. But more significantly, the Hilton Union Square and Parc55 properties are going to remain hotels, and won't be converted to housing, as there’d been some speculation last year that they could be.
Image: Hilton San Francisco Union Square via Yelp
