Trophy property alert: The Ritz-Carlton in San Francisco may be coming up for sale. But it won’t be cheap.
If, as expected by market pros, the 336-room luxury hotel north of Union Square is listed in coming weeks, it could fetch $168 million – or $500,000 a room, according to trade publication Real Estate Alert.
What could be making market watchers quiver with anticipation is a recent earnings call by the current owner, Host Hotels Resorts. CEO Edward Walter said the real estate investment trust is considering selling hotels whose market value has recovered from the depths of the recession, “so that we can feel comfortable that we’re not leaving a material amount of value on the table by selling in 2012.”
As we noted last week, the San Francisco hotel market has rebounded, with some of the biggest price increases in the country in 2011, and it’s likely to get even hotter in 2012. The $168 million figure comes close to the $172 million the Westin San Francisco - which has twice as many rooms as the Ritz-Carlton – went for last year.
Host Hotels, which owns six other hotels in the Bay Area, did not return a call requesting comment Monday. The REIT, headquartered in Bethesda, Md., controls in whole or part about 72,000 rooms in the United States and overseas. It recorded $1.66 billion in revenue last year.
So, why would Host Hotels let go of its San Francisco trophy?
“They are looking to capitalize on opportunistic values, such as the other ones we’re seeing in San Francisco,” said Alan Reay, president of Atlas Hospitality Group, an industry research and consultancy company in Irvine. “By selling the Ritz-Carlton here, they could deploy capital in markets where they see better buying opportunities.”
Dry hole: As of next month, San Francisco will be without a Gordon Biersch Brewery Restaurant for the foreseeable future.
Closing time is April 28 when its lease, at the Hills Plaza complex on the Embarcadero, is up.
“We couldn’t come to an agreement with the landlord,” said Carrie Kleban, chief marketing officer of CraftWorks Restaurants and Breweries, which owns Gordon Biersch. The landlord, Morgan Stanley, bought Hills Plaza from Shorenstein Properties for $198 million in 2004.
CraftWorks, headquartered in Tennessee, is looking for another spot in San Francisco, preferably close to the Hills Bros. Coffee building where the brew pub has operated for the past 20 years. “We’re working fast and furiously, but it may take a little time,” Kleban said.
It’s also looking to relocate the approximately 80 employees, some of whom will go to the two other Bay Area Gordon Biersch Breweries, in Palo Alto and San Jose. Others will be getting “transition” assistance from an agency affiliated with the California Employment Development Department.
Founded in the Bay Area in 1988, Gordon Biersch has 35 outlets in the United States and Asia. How long should San Franciscans wait for it to return to San Francisco? “We love San Francisco, but it’s all about real estate availability,” Kleban said.
And, presumably, the rent.
Compare and contrast: The Hills Bros. Coffee building, which dates to 1926, is No. 157 on San Francisco’s list of historical landmarks. As part of its campaign to resist moving now that its lease is up, the Gold Dust Lounge, which opened in 1966 on Powell Street, is attempting to be included in that august company.
It probably shouldn’t count on the San Francisco Chamber of Commerce as one of its supporters.
In a letter to the city’s Historic Preservation Commission, the chamber said the Gold Dust’s request “is an attempt to politicize a simple landlord-tenant relationship. The Gold Dust Lounge has known for years that their lease would be coming to an end and are clearly applying to the Commission as a last ditch effort to stall an eviction process that has been a long time coming. Approving this would be a true misuse of the term ‘landmark’ in San Francisco.”
Oh, and as reported in today’s Metro section, Handlery Hotels, the owners of the building that houses the Gold Dust, filed an unlawful detainer suit against the bar’s proprietors for failing to vacate the premises by Saturday, as called for in the lease.
New life from north of the border: As of today, Canadian life sciences companies have a home at San Francisco’s biotech hub in Mission Bay.
Four Canadian companies will be setting up shop at the Canadian Technology Accelerator on UCSF’s Mission Bay campus. Three are based in Vancouver: Aquinox Pharmaceuticals, which focuses on small molecule therapeutics; BioMark, which specializes in portable screening devices to detect cancers; and Precision NanoSystems, which has come up with ways to deliver drugs intravenously using nanotechnology. The fourth, Clinisys, headquartered in Edmonton, Alberta, develops digital medical record systems.
Canadian ambassador Gary Doer will be on hand with Mayor Ed Lee to open the incubator at UCSF’s California Institute for Quantitative Biosciences (QB3). “This partnership marries Canada’s world-class basic research institutions and life sciences companies with QB3′s proven expertise in translating science to commercial success,” said Doer.
“Faster commercialization means greater ROI, and that means greater success for both our economies.”
This article appeared on page D – 1 of the San Francisco Chronicle