Built in 1987 at the corner of Post and Mason Streets in theUnion Square district, the hotel has 17,000 sf of meeting space, aconference center and two food and beverage facilities. On theheels of a $3.8-million renovation in 2004, Ashford officials saythe hotel will see another $10 million in improvements and berebranded "with a well known luxury flag." The renovations,consisting of "revenue-enhancing" upgrades to meeting space, roomsand food and beverage facilities, will push Ashford's all-in costto more than $310,500 per key.

The property generated revenues of $25.5 million for thecalendar year 2005. On a trailing 12-month basis, the purchaseprice equates to a (net operating income) cap rate of 3.9%. On aforward twelve-month basis, the purchase price equates to a (netoperating income) cap rate of 6.5%.

The acquisition is the first in San Francisco for Ashford, whichowns 13,558 rooms in 80 properties. Company CEO Monty Bennett ispredicting its new San Francisco property will experience mid-teensgrowth in RevPAR in 2006. "San Francisco's hotel market is poisedfor a dramatic turnaround like that experienced in New York," hesays. "San Francisco will be one of the preeminent growth marketsin the US."