Market-watchers would do well not to construe Kimpton Hotel & Restaurant Group’s proposed sell-off of five of its San Francisco properties as anything other than a logical repositioning of the company’s lodging holdings on the West Coast.
According to spokespersons for the hotel-ownership/management firm, the five properties—the Cartwright Hotel, the Hotel Cosmo, the Galleria Park Hotel, the Hotel Juliana and the Hotel Vintage Court—and their combined total of 649 rooms are on the block because of disappointing guestroom-booking levels.
According to previous reports, Kimpton President/CEO Tom LaTour initially hung a “for sale” sign on this quintet of properties nearly three months ago, in the wake of this city’s hotels posting what was billed as “the worst per-room sales decline in the country, year to date.” On this note, company sources allowed: “It is true the San Francisco market is down worse than other markets, but San Francisco is a world-class city and we expect business to return.”
However, any anticipated rebound of the city’s lodging fortunes will likely proceed without the aforementioned hotels remaining in Kimpton’s more-than-three-dozen-property portfolio. Indeed, emphasis on the disposition of these facilities actually seems to have been stepped up as Kimpton—and its brokerage representative, Eastdil Realty—are pushing a Jan. 14 deadline on offers for the properties.
It had been conjectured in other accounts of this pending multi-site transaction that “such a call for offers could produce better [bids] than the company would have obtained by waiting.” On the other hand, another purported school of thought had it such a marketing ploy “could also be a prelude to pulling the properties off the market.”
Kimpton sources affirmed EVP Jim Whelan did, in fact, report receipt of more than 60 inquires into the availability of the properties, and it was agreed this avowed deadline is indeed aimed at giving potential buyers the time as well as the motivation to come forward with offers.
Regardless of the ultimate fate and/or purchase price of these hotels, it was contended Kimpton is absolutely not contemplating the sale of any other properties at this time. In fact, the company is continuing along in a growth mode, with Kimpton sources noting: “We are actively in the market acquiring assets in the traditional format.” To this end, it was pointed out the firm is certainly not giving up on this city-by-the-bay, what with the new Argonaut at Fisherman’s Wharf joining nearly a dozen other Kimpton lodging properties here when it opens its doors in nine months.
Furthermore, new examples of Kimpton style and substance will similarly be evident on the other side of the country this coming year when the company opens the Marlowe in Cambridge, MA in March, to be followed by another as-yet-nameless hotel in Boston.
Offering up one final observation on the state of the economy as well as the status of the organization, company officials contended: “Kimpton Group is profitable. This is an unusual business cycle. We have been in business 21 years and have experienced tough business cycles in the past, but despite past economic slumps, we have continued to grow and prosper.”