Blackstone has purchased the Four Seasons Hotel in downtown San Francisco in the latest sign of the city’s real estate recovery.
The Four Seasons confirmed in a statement that the global investment giant had acquired the downtown hotel; a price was not disclosed. The Wall Street Journal reported last month that Blackstone was close to a deal to buy the 277-room hotel for $130 million.
“The city 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,” said Scott Trebilco, a senior managing director at Blackstone Real Estate.
That price reveals how far the city's hospitality market has fallen in recent years. It breaks down to around $470,000 per room, representing a steep discount from San Francisco’s pre-COVID-19 days, before tourism evaporated and negative headlines about crime damaged the city’s reputation. San Francisco remains the least recovered market in the country in terms of hotel demand, though that appears to be changing thanks to leases from artificial intelligence startups and rapidly rising rents.
Mayor Daniel Lurie celebrated the recent sale of two of the city’s largest hotels, the Hilton San Francisco Union Square and Parc 55 San Francisco, to Newbond Holdings and Conversant Capital following two years in which they languished without an owner and came to symbolize the city’s real estate woes.
The purchase price of $408 million for a combined total of nearly 3,000 rooms in downtown San Francisco represented a nearly 75% discount from the hotels’ appraised $1.56 billion value in a 2016 financing.
'Renewed confidence'
Four Seasons General Manager Stéphane Gras said in a statement that Blackstone’s acquisition of the hotel signified “a renewed confidence in San Francisco’s tourism landscape.”
Looking ahead, full-year revenue per available room, or RevPAR, is projected to grow by approximately 6% in 2025 and 2026, driven largely by high-profile events in the Bay Area such as FIFA World Cup matches and the 2026 Super Bowl.
Investment firm Sixth Street announced last month that it had acquired The Clancy, a 410-room hotel, for $115 million.
The San Francisco Planning Commission has approved a proposal for a 29-story hotel downtown with 211 rooms at 570 Market St. in the Financial District, with officials saying the establishment would be well timed to serve a revived hospitality market in the city. The new hotel was proposed back in 2019, when the city had a decade of steadily growing year-over-year tourism numbers.
Blackstone has not slept on the city's rebound, reentering San Francisco's real estate market this year and partnering with DivcoWest to buy an office building at 300 Howard St. for $111.34 million in what was then the largest office transaction to close in the city's post-pandemic era.