Family Shops 3 Hotels in San Francisco Area
A family business is offering three boutique hotels in the San Francisco area that have a combined value of about $110 million.
Up for grabs are the high-end Huntington Hotel at the top of Nob Hill, Galleria Park near Union Square and La Playa Hotel and Cottages-by-the-Sea in Carmel-by-the-Sea, Calif.
The hotels, which encompass 398 rooms, are being offered as a portfolio via Holliday Fenoglio Fowler. They represent the entire holdings of Nob Hill Properties, a San Francisco firm controlled by the Cope family and formerly run by Newton Cope, who died in 2005.
Huntington Hotel and La Playa are unencumbered by brands or management contracts. That represents an unusual opportunity in the San Francisco area, where most hotels are tied up with long-term contracts. Galleria Park is leased to hotel operator Joie de Vivre Hotels.
Huntington Hotel is in the luxury category, and Galleria Park is classified as "independent boutique." Like other core hotel markets, San Francisco has seen a pullback in occupancy and revenues. But that appears to be leveling off.
The 140-room Huntington Hotel, which opened in 1924, hasn't previously been offered on the open market. It has undergone significant renovations that positioned it to compete with luxury hotels, such as the Fairmont and Ritz-Carlton. The 12-story hotel, at 1075 California Street, includes Big 4, one of the city's top-rated restaurants, and the high-end Nob Hill Spa.
Financial information for Huntington Hotel was unavailable. But luxury hotels in San Francisco saw revenue per room fall by 22% last year, to $156.47, according to Smith Travel Research. The average occupancy rate slipped to 69.5% from 74.4%, and room rates declined by almost 17%.
The 177-room Galleria Park is at 191 Sutter Street, near the Moscone Convention Center. It has conference and meeting rooms and a restaurant, Midi. Comparable hotels in the city posted a revenue-per-room decline of 21% last year. The average occupancy rate slipped to 66.3% from 67.5% in 2008. Room rates fell 19%.
La Playa Hotel, which has 75 rooms and six stand-alone cottages, is two blocks from Carmel Beach in an exclusive section of the Monterey Peninsula. It is near upscale shops and restaurants, as well as Pebble Beach golf course. Financial information for the hotel was unavailable. But comparable "upper upscale" hotels in the area posted an 18% average decline in revenue per room last year. The average occupancy rate fell to 56.2% from 63.9%. Room rates dropped by 7%, to $249.28.