$73.9 Million Non-Performing Luxury Hospitality Loan | San Francisco, CA

Attributes

Keys

155

Year built

1987

Year renovated

2022

Land area gross

0.42 ha

Parking spaces

180

Unpaid principal balance

₱4,353,206,389

Loan status

Non-Performing

Current interest rate

9.94%

Maturity date

06/01/2024

Asset description

Jones Lang LaSalle (“JLL”) has been retained on an exclusive basis by the Seller to arrange the sale of a $73.9 million non-performing luxury hospitality loan (the “Loan” or “Note”). The Loan is secured by the first-lien on the fee and leasehold deed of trust in a full-service luxury hotel located in the Financial District of downtown San Francisco, CA (the “Property” or “Collateral”). In December 2023, the Loan went non-performing via a payment default. As of May 2024, the Loan has an unpaid principal balance of $73,946,100.

The Collateral is comprised of a 155-key luxury hotel property situated on the top 11 floors (38-48) of the third tallest mixed-use Class A office building in the Financial District in downtown San Francisco, CA. Constructed in 1987, the hotel completed a $32.1 million ($207,000 per key) renovation in October 2022. Managed by a luxury hotel brand, the Property features over 5,000 square feet of meeting space, a business center, luxury spa, modern fitness facility, sky deck, restaurant and lounge, and 180 parking spaces via a subterranean parking garage.

The offering presents investors the opportunity to acquire the Loan at a favorable basis, significantly below replacement cost and historical sales for luxury product in the market, with a potential path to ownership.

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Investment highlights

Path to Ownership

The non-performing Loan provides investors the ability to potentially step into the ownership position on a full-service luxury hotel at an attractive basis as foreclosure proceedings have already been initiated.

Exceptional Location

The Property is conveniently located in close proximity to direct access points of public transportation and ideally situated in the Financial District near major public amenities and attractions.

Value Play

With a December 2023 TTM occupancy of 58.4% at an average room rate of ~$630, investors are provided a significant value-add component on a luxury hotel by capitalizing on the return of the San Francisco hospitality market and improved operational performance and efficiencies.

World-Class Hotel Management

The Property is managed by the most award-winning hotel management company in the world, whose properties consistently appear on “The World’s Best” lists. With locations in some of the world’s most prestigious gateway markets and exclusive resort destinations, this collection of iconic hotels and resorts each has a unique personality centered around the managements unmatched reputation for quality and service.

Exceptional Product Quality

Following an extensive $32.1 million ($207,000 per key) transition and renovation, the hotel’s room product quality is the best in the market, offering stunning ocean, bridge, and city views that are unmatched by any other hotel in the city.