Dive Brief:
- Blackstone Real Estate acquired the 277-key Four Seasons Hotel San Francisco, according to a release obtained by Hotel Dive. The investment company declined to provide additional terms of the deal, though The Wall Street Journal previously reported the transaction was priced near $130 million.
- The luxury hotel, located in the city’s core on Market Street, offers The Spa at Equinox and Equinox Sports Club; MKT Restaurant & Bar, which has a California-inspired menu; and Veranda Terrace, the rooftop lounge and patio.
- The deal comes amid “a renewed confidence in San Francisco’s tourism landscape,” General Manager Stéphane Gras said in the release. The market had previously faced significant difficulties after a slow recovery from the COVID-19 pandemic, but Blackstone is optimistic about its resurgence, Senior Managing Director Scott Trebilco said in the release.
Dive Insight:
Last month, in a video posted to LinkedIn, Blackstone President and COO Jon Gray gave his followers some words of wisdom: “Very simply, buy some real estate here,” he said, referring to San Francisco. That advice became action with Blackstone’s recent investment.
The company’s Four Seasons buy follows a “brutal five-plus years” for San Francisco, Gray said in the video. However, the market is “really starting to turn” as tourism is boosted by an ongoing “AI revolution,” with companies including Anthropic and OpenAI growing in the market, Gray said.
Trebilco echoed a similar sentiment in the release, saying San Francisco “is experiencing a surge in demand and office utilization, driven by significant new AI investment, which we believe is supporting a strong rebound in travel and hospitality.”
Blackstone joins other investors that are bullish on the market. Last month, Newbond Holdings and Conversant Capital acquired two of the city’s biggest hotels — Parc 55 and Hilton Union Square — for a combined $408 million, though that was nearly 75% below the properties’ value in 2016, The San Francisco Standard reported.
The hotels had previously lapsed into foreclosure after owner Park Hotels & Resorts ceased loan payments in 2023. Last year, it was reported that the complex housing the two hotels had seen its value drop by $1 billion.
JLL reported earlier this year, though, that San Francisco’s hotel market was poised for “robust recovery,” with the firm calling out the city’s “burgeoning AI sector.”
As for the Four Seasons, Blackstone “brings deep expertise and fresh perspective” that will “strengthen operations, expand our offerings, and continue raising the standard of hospitality,” General Manager Gras said.
Elsewhere, Blackstone recently sold the 1,003-key Sheraton Phoenix Downtown to Brookfield. Realty Income, meanwhile, made an $800 million investment in Blackstone’s CityCenter real estate holding in Las Vegas, which comprises Aria Resort & Casino and Vdara Hotel & Spa.
