In a significant move that suggests growing optimism in San Francisco's hospitality scene, investment giant Blackstone Inc. has wrapped up its acquisition of the Four Seasons Hotel San Francisco. The property, located at 757 Market Street, is a 277-room luxury establishment that's been at the high end of the city's accommodation offerings. While the city's recorder has not yet made the deed of sale public, and Blackstone has kept mum on the exact figures, it's believed the deal closed around $130 million—a valuation that comes to about $470,000 per key, Four Seasons announced.
Such a deal indicates a price cut from what seller Westbrook Properties had initially hoped to fetch when the hotel hit the market in 2024. The San Francisco Business Times previous reports on this matter have highlighted the lowered valuations in the city's hotel sector. Despite the relatively lower sale price, and mirroring the concerns that have weighed down the city, such as sluggish tourism recovery and steeper insurance premiums, Blackstone appears confident in San Francisco's turnaround. According to a LinkedIn video, Blackstone President Jon Gray proclaimed, "This town has of course been through a brutal five-plus years, and now things are really starting to turn," crediting the local leadership and a burgeoning AI sector for the uplift. "Major companies, like Anthropic and OpenAI, growing, leading to more business activity. Tourism is going to come back," Gray stated.
This acquisition marks Blackstone's first hotel buy in the city in about a decade, underscoring its vote of confidence for the city's recovery trajectory. "San Francisco is coming back, and major investments like this one show that momentum is building every day," asserted Mayor Daniel Lurie last month—showing leadership's alignment with investor sentiment. According to Blackstone, the rejuvenated office utilization, spiked notably by AI investments, is underpinning a more robust hospitality sector.
Other investors appear to share Blackstone's sentiments, as evidenced by recent high-profile transactions. Noted for reflecting a pre-pandemic rejuvenation of the city, New York investors Newbond Holdings and Conversant Capital dropped $408 million in 2024 for the Hilton San Francisco Union Square and Park 55—a contrast to the steep 75% drop from its 2016 appraisal, reported the San Francisco Chronicle. Meanwhile, Blackstone's acquisition of the 300 Howard St. office tower earlier this year, along with DivcoWest, also underscored their growing stake in San Francisco's real estate market. Just a few weeks prior, Sixth Street Partners made waves with their $115 million purchase of the 410-room Clancy Hotel.
