Ritz-Carlton San Francisco Sold by Host for $161 Million

Host Hotels & Resorts Inc. (HST), the largest U.S. lodging real estate investment trust, sold the Ritz-Carlton San Francisco for about $161 million to closely held investment firm Thayer Lodging Group.

The purchase of the 336-room luxury hotel is the first investment by the $300 million Thayer Fund VI. Thayer Lodging plans to spend as much as $17 million on renovations at the property in the next two years, the Annapolis, Maryland-based company said in a statement.

Room rates at San Francisco hotels are growing faster than in most of the country. Nightly charges rose 7.5 percent this year through April, higher than the 5.2 percent growth for the top 25 U.S. markets, according to Hendersonville, Tennessee-based research firm STR. Net operating income at the JW Marriott San Francisco Union Square, which Thayer bought in 2011, has tripled since the purchase, the company said.

“We are bullish on the San Francisco market, and bullish on the environment for investing in hotel real estate,” Thayer Chief Executive Officer Lee Pillsbury said in the statement. “We look forward to making additional announcements in the weeks ahead.”

The average daily rate this year through April at San Francisco hotels was $169.83, with only rooms in New York, Miami and Oahu, Hawaii, priced higher, according to STR.

Rooms at the Ritz-Carlton San Francisco -- which have 400-thread-count linens, Bang & Olufsen 10-speaker surround-sound systems and Kohler rain shower heads -- start at $335 this week, according to the hotel’s website. The property also has a Parallel 37 restaurant and full-service Spa De Vie.

San Diego

Thayer also owns hotels such as the San Diego Marriott Del Mar and the Annapolis Marriott Waterfront in Maryland. Bethesda, Maryland-based Host Hotels, owner of such properties as the W New York - Union Square and the Ritz-Carlton in Phoenix, acquired the high-end, 775-room New York Helmsley Hotel in midtown Manhattan in 2011. Last July, the REIT bought the Grand Hyatt Washington for about $400 million after backing out of a pricier deal for the District of Columbia property at the end of 2011.

To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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