San Francisco Hotel Investments

San Francisco Hotel Investments

San Francisco Hotel Investments

Hotel Equity Fund – San Francisco CA Hotel Investments in California

San Francisco – Hotel Market Report 2020

Due to its diverse economy and strength in varied fields (health, finance, education, technology, etc.), San Francisco has a thriving hotel industry.

Indeed, this area is at the center stage of tech innovation. Industry-leading technology giants, such as Google, Apple, Facebook, eBay, and Hewlett-Packard (HP) make their home in San Francisco.

This city is a major center of employment in the high-tech and financial category. Several key factors contribute to the tremendous success of this lodging sector.

The greater San Francisco hotel market has a significant commercial base. There is an ever-expanding tech industry and overall dynamic economy in the San Francisco Bay area.

The recent $550-million renovation and expansion of the Moscone Convention Center demonstrates the prosperous state of this city’s economy. Conventions mean high demand, and hotel owners can establish higher rates. 2019 was a record convention year for guest room bookings.

At the same time, the city prepared to welcome several new hotel developments, upgrades, and expansions, as well as other major construction projects. San Francisco is prime for development.

Between 2017 and the beginning of 2019, almost 1000 new rooms had opened in this region. Of course, the healthy state of this marketplace means that it can always absorb new supply.

At least three branded properties opened in the first quarter of 2018, and others were in the construction phase. Higher-rated properties can support continued ADR growth.

Hotel sales in 2018 tripled from the previous year. The most notable transaction involved five hotels that sold together as part of a portfolio for prices between $82.5 million and $148.6 million – $629,850 per room for all five properties.

By the summer of 2019, CBRE Hotels reported that about 20 new hotel projects were at some point in the development stage. Over 1,445 rooms were under construction in August 2019, and there were plans for an extra 3,400 rooms.

Within the greater Bay Area during summer 2019, 50 hotels were under construction or in the planning process. These new properties would add over 7,200 rooms (13.5% of the market in August 2019) to the metropolitan region. During the past several years, many hotels have also been renovated at a total cost of over $275 million.

STR, a third-party data vendor that provides hotel industry data, projected RevPAR growth of 3% or higher in 2019 for San Francisco/San Mateo. Only three other U.S. markets were expected to reach these levels during that year.

By early 2019, occupancy rates came in between 80% and 85%, and the average daily room rate was $225-$235. This hospitality sector includes 34,000 plus rooms – and a new supply.

Between August 2019 and year’s end 2021, at least seven new hotels are projected to open from the south region to the northern area (between the San Francisco International Airport and Fisherman’s Wharf).

Even the Paris-based video game company Atari has chosen San Francisco as one of the U.S. sites for their new game-themed hotels.

Yet with all the additional supply, there will still be a continuing demand for lodging properties through the Bay Area.

The future outlook is positive for the San Francisco hotel market. This city is the gateway to the Asia-Pacific area; it is a world-class tourist destination.

San Francisco remains a strong year-round draw for a mix of visitors – commercial, meeting and group, and leisure travelers. The city offers natural beauty, amazing attractions, fabulous venues for hosting functions, and a delectable culinary scene.

During 2017, the San Francisco International Airport achieved a new record for passenger traffic. This result followed consistent highs for the six previous years. San Francisco tourism rose to record highs in 2018 with 25.8 million visitors.

Also, during 2017, San Francisco set a new record for leased office space – 11.9 million square feet in fresh deals and lease renewals in 2018.

During 2020, San Francisco is expected to see average daily rates increase by 6 percent. This lodging sector will continue to rank among the leading domestic hospitality markets.

Out of the top 25 markets, STR projects that two – San Francisco and Miami – will see RevPAR growth of 3% or more. STR data also notes that the nation’s luxury hotels will achieve the highest rate of RevPAR growth at 1.8 percent. During summer 2019, at least 30 of the 50 greater Bay Area hotels under construction or in the planning stage were higher-priced accommodation.

San Francisco is one of the top U.S. gateway cities. Its hotel market (defined as San Francisco and San Mateo counties) will always be attractive to hotel developers and investors.

HOTEL EQUITY FUND INVESTMENT PARTNERS

 

Acquisitions and Investments

Hotel Equity Fund is one of the top hotel investment in Europe, and now expanding to New York City, West Hollywood CA, South Beach Miami Florida, Chicago, San Francisco, Washington DC, London, Paris, Berlin, Toronto, Jerusalem and Tel Aviv Israel, with results that have consistently bested industry averages. Much of this success is a direct result of our focus on investor returns, individual assets, and aligning management with the individual needs of owners. Our combination of strong capitalization through Hotel Equity Fund, and a strong track record of experience offer a level of credibility that is nearly unmatched in the industry.

 

 

Investment Criteria

We are aggressively seeking new properties in New York CityWest Hollywood CASouth Beach Miami Florida, ChicagoLos Angeles, San FranciscoWashington DCLondon UKParis,  BerlinToronto ONMontréal Québec, Israel including Tel Aviv and Jerusalem, and feel that our centralized operation of business in New York offers the very type of responsiveness, professionalism and capital resources the industry has been seeking. Please click here to review the investment criteria.

 

Development Opportunities

Our Hotel Equity Fund owned hotel and resort development subsidiary, Hotel Equity Fund Development, has extensive experience in resort, hotel, and golf course development, with recent hotel development and hotel redevelopment projects totaling over $2 billion. Our projects are well known for meeting market demand and for attention to both design and operating detail. Our culture of “listening to the customer” is at the heart of our development process and has allowed properties to excel in both operating performance and value retention.

 

Boutique Hotel Investments

Boutique hotels, also known as lifestyle hotels, vary in shape and size; however, all boutique hotels rely heavily on creative energy and highly personalized service to compete in the overall hotel industry.

Hotel Equity Fund is a respected financial hotel investment firm, utilizing hotel equity funds to assist its hotel real estate developers and partners in gaining favorable returns on their investments. Hotel Equity Fund works with a range of hospitality firms to increase the efficiency and effectiveness of individual hotel properties, ranging from boutique hotels with excellent F&B, premium brands to mid to up-scale well-located properties.

Since 1980, the Hotel Equity Fund and Hotel Equity Fund Partners Investment Program have invested over $2 billion into quality hotel real estate properties with aggregate transaction capitalization of nearly $3 billion. By partnering experienced advisors with each investment partner, Hotel Equity Fund ensures that each property is equipped with a creative vision and practical management plan to achieve long-term financial sustainability and success.

 

Hotel Developments & Acquisitions

Hotel Equity Fund routinely assesses joint venture development opportunities which provide long-term alignment of interests for both Hotel Equity Fund and prospective partners in New York CityWest Hollywood CASouth Beach Miami Florida, Chicago, Los AngelesSan FranciscoWashington DC, Toronto Canada, LondonParis, Jerusalem and Tel Aviv Israel.

Experienced, multi-brand, investment-grade hotel developers, Hotel Equity Fund will take a project from dirt or acquiring an Landmark Building for hotel conversion to a stabilized hotel through hotel disposition. Offering a variety of hotel investment services, our specialized team can meet your unique hotel project requirements including, but not limited to, the following:

 

  • Assist in hotel site selection and property evaluation.

 

  • Evaluate benefits of and selection from available boutique brand or a national brands.

 

 

 

  • Make recommendations regarding legal entity and JV agreement options.Prepare preliminary hotel construction cost estimates.

 

  • Offer professional market study or appraisal recommendations.

 

  • Assist in selection and coordination of attorney, architect, civil engineer, project manager, general contractor,

 

  • FF&E procurement and interior design.

 

  • Provide construction, financing, permanent debt, refinancing and disposition roles.

 

  • Execute long-term management contract services.

Hotel Equity Fund’s proven investment methods mitigate risk and encourage success, combining our investment and management fluency with the strength and potential of partner assets. If you would like to read more about the positive impact we have made with our hotel equity fund, please explore the entirety of this website.