CNL Takes Out Partner in Downtown Hotel

SAN FRANCISCO-The 405-room Courtyard San Francisco Downtown Hotel is now fully owned by CNL Hotels & Resorts Inc. The Orlando-based hotel REIT with 92 hotels to its name acquired the 51.85% it didn’t already own in a deal that valued the hotel at $79.5 million, or $196,000 per key. The seller was Marriott International Inc.

The 18-story hotel opened in 2001 at Folsom and Second streets, two blocks from the Moscone Convention Center. Amenities include two on-site restaurants, a fitness center and an indoor pool.

CNL executive vice president Brian Strickland did not immediately return a phone call seeking more information regarding the Courtyard acquisition. In a prepared statement, CNL chief executive Thomas Hutchison says the property “is a strong performer in a strengthening San Francisco market, a market that has lagged the U.S. market recovery and poised for substantial upside.”

Hutchison is not alone in his assessment. Several hotels have changed hands in recent weeks and months as both buyers and sellers look to capitalize on the rebounding market. The Griffon Hotel, one of only three hotels located along the Embarcadero, traded for $15.25 million, or $246,000per key; the 360-room Park Hyatt hotel in the Financial District sold in early May for about $126 million, or $350,000 per key, and was re-branded a Le Merdien; in April, Ashford Hospitality Trust of Dallas acquired the 338-room Pan Pacific San Francisco Hotel for $95-million, or $281,065 per key, and re-branded the property a JW Marriott hotel; at the end of March, the Argent hotel on Third Street between Market and Mission was sold for $178 million, or $258,000 per key, and may be converted to a Westin.

Earlier this month, Buchanan Street Partners was tapped to sell the Monticello Inn, a boutique hotel located in a 1907 building situated between Union Square and the soon-to-open San Francisco Centre expansion. The property contains 91 guestrooms, including 20 two-room suites, the Puccini & Pinetti Restaurant, two retail tenants and a 17-space subterranean parking lot. Local industry sources tell GlobeSt.com the property should fetch a price north of $20 million ($220,000 per key).