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SAN FRANCISCO-The 32-story InterContinental Hotel San Francisco opened for business Thursday at the corner of Fifth and Howard streets. At 550 rooms, the estimated $200-million development by Continental Development Corp. of Atlanta is the largest hotel to open in San Francisco in 20 years.

The hotel is opening in a good location — on the same block as the Moscone West Convention Center – and into a healthy hospitality market. San Francisco hotels had an average occupancy rate of 77.9% in 2007, up 3% from 2006 and well above the nationwide average of 63%, according to PKF Consulting, which tracks the hotel business. In December, PKF predicted 7.4% RevPAR growth for San Francisco hotels in 2008, which is 300 basis points higher than the average expectation for hotel properties nationally.

“It’s opening into an extremely strong market,” Tom Callahan, the co-president and chief executive officer of PKF Consulting in San Francisco tells GlobeSt.com. “In its first year management’s estimate and our estimate is for occupancy above 70%, which is pretty unusual for a 550-room hotel. Generally, they ramp up much more slowly.”

Helping the hotel hit that mark will be convention-goers. For 2008, more than 977,000 room nights have been booked for convention-goers to date, up from about 770,000 in 2007, and nearly 900,000 rooms have been booked for 2009 convention-goers, according to PKF. “Pre-bookings are outstanding,” Callahan says. “The next three- to four years look to be great years for the convention calendar.”

Located at 888 Howard St., the InterContinental Hotel San Francisco is a glass tower with floor-to-ceiling windows in every room. Amenities include an indoor lap pool, a 2,200-sf fitness center, a spa and baby-sitting services. A typical room will range from $250 to $400 per night, while suites will range from $1,500 to $5,000 per night. The 4,000-sf, two-level Presidential Suite is $5,000 per night.

Continental Development Corp. applied for permits to develop the property with a hotel in September 2000. Original plans called for a 39-story building that included 70 market-rate condominium units on the top floors. The proposal–minus seven stories and the condos–won approval from the planning commission in 2002. Continental Development Corp. broke ground for the project in 2005. UK-based InterContinental Hotels Group owns a minority stake in the project.

The design architect was Patri Merker Architects and the construction architect was Hornberger+Worstell. Brayton+Hughes Design Studio was the interior design firm. Webcor was the general contractor.

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