JLL Marketing Debt on Bankrupt Nob Hill Landmark

JLL is marketing a century-old landmark hotel on top of Nob Hill as “a blank slate opportunity for an investor.”

The Huntington Hotel, a handsome relic of a time gone by, has been shuttered since the beginning of the pandemic and went into default in November 2020.

Woodbridge Capital owns the venerable 12-story, 134-key hotel at 1075 California Street, which it said was closed “until further notice” last month. The mortgage on the hotel is held by Deutsche Bank.

JLL is offering for sale a $52.2M non-performing senior loan on the hotel. According to JLL’s marketing materials, “the loan provides a blank slate opportunity for an investor to acquire a NPL secured by an upscale hotel in one of San Francisco’s most exclusive neighborhoods.”

The Huntington was built in 1924 as an apartment building. Named after a noted local tycoon, Collis Huntington, the building became a hotel with a famous restaurant known as the Big 4—an homage to the four mega-tycoons that hung out there, including Leland Stanford, Charles Crocker and Mark Hopkins.

Hopkins also had a San Francisco hotel named after him. Not to be outdone, Stanford arranged to name a university after himself.

The Huntington also is famous 11K SF Nob Hill Spa, which is one of the few indoor pools in San Francisco. The hotel, restaurant and spa have been closed since April 2020.

Woodbridge has owned the Huntington since September 2018, when it bought the property from Grace International of Singapore for $51.9M. According to a report in the San Jose Mercury News, Deutsche Bank says it is owned a total of $61.1M, including penalties, late fees and unpaid interest.

The property reached a maturity default in October 2021; foreclosure proceedings on the Huntington began in August.

According to recent market reports, hotel sales in the Bay Area dropped by $2B during H1 2022. But century-old hotels in San Francisco have been a hot commodity—particularly for Pebblebrook Hotel Trust, the hotel and resort REIT, which has been busy selling them to fund the recent expansion of its US resorts portfolio.

In August, Pebblebrook—the largest investor in San Francisco hotels—finalized the sale of the iconic, 99-year-old Hotel Spero. The venerable 236-room lodging on Taylor Street had a net operating loss in the past year of $1.6M, according to a release posted on Pebblebrook’s website.

The deal marked the fourth century-old San Francisco hotel the REIT has sold since April 2021, and the second in two consecutive months.

Hotel Spero, which opened as the Hotel Californian in 1923, features Spanish Colonial-style architecture and a lobby with hand-painted wood ceiling beams and a diner-style restaurant. The boutique hotel was renovated in 2018.

At the end of June, Pebblebrook sold another century-old hotel in San Francisco, The Marker Hotel, for $77M to Stockdale Capital Partners. The 208-room boutique hotel is located at 501 Geary Street near Union Square in SF.

Last year, the Bethesda, MD-based REIT initiated a strategy of funding new acquisitions by cashing in some its historic properties. In September, the REIT sold the 189-room, century-old Villa Florence in Union Square for $87.5M, equaling $463 per key. In April 2021, Pebblebrook sold the 416-room, century-old Kimpton Sir Francis Drake Hotel for $158M.