Strategic Hotels & Resorts, Inc. has signed an agreement to acquire the Westin St. Francis San Francisco hotel from an affiliate of Blackstone Real Estate Partners for a purchase price of $440.0 million.
The acquisition, which is expected to close during the second quarter 2006, remains subject to customary closing conditions.
The 1,195-room iconic hotel is located on Union Square in the heart of downtown San Francisco. The hotel features 45 luxury suites, 50,000 square feet of meeting space, 39,000 square feet of retail space with a significant presence on Union Square, a 4,600 square foot health club and spa, and four premium food and beverage outlets. Westin, an affiliate of Starwood, will continue to manage the property subsequent to the closing of the acquisition.
The company forecasts that the property will contribute between $19.0 million and $21.0 million of EBITDA in the last seven months of 2006 and between $32.0 million and $34.0 million in the first twelve months of ownership.
Laurence Geller, Chief Executive Officer of Strategic Hotels & Resorts, commented, “San Francisco has lagged the broader market recovery and is poised for significant and sustainable growth. The St. Francis enjoys the city’s premier location as the only hotel facing Union Square, the center of San Francisco’s finest retail outlets and tourism market. Significant value-added opportunities exist through the conversion and realignment of the retailing space, guestrooms and public areas to capitalize on the hotel’s scale, location and existing facilities. This transaction represents a continuation of the strong relationship we have enjoyed with Blackstone over the past decade.”