Pebblebrook unloads Hotel Zoe Fisherman’s Wharf in San Francisco for $69M
REIT sells for $310K per room, resulting in a $54M loss in eight years
Pebblebrook Hotel Trust has jettisoned the Hotel Zoe Fisherman’s Wharf for $68.5 million, one of two hotels it planned to sell in San Francisco.
The Maryland-based real estate investment trust sold the 221-room hotel at 425 North Point Street, the San Francisco Business Times reported. The buyer was undisclosed.
Pebblebrook bought the 33-year-old Hotel Zoe in 2015 for $122 million, or $552,000 per room. The sale, priced at $309,955 per room, is expected to close by year’s end — for a $53.5 million loss.
Last spring, the Bethesda-based REIT indicated it was also poised to sell the 196-room Hotel Zeppelin San Francisco at 545 Post Street. It may have scotched those plans after opening the PLS on Post anchor restaurant last month, according to the Business Times.
It purchased the 110-year-old Hotel Zeppelin in 2014 for $49 million, or $306,000 per room.
The sale of the Hotel Zoe marks the fifth hotel Pebblebrook has sold in the city since 2021.
The hospitality firm began 2020 with 12 hotel properties in San Francisco, its largest hotel market. Then as the pandemic ramped up, it sold four of its hotels across the city.
The sales included the Sir Francis Drake in early 2021 to Northview Hotel Group and Angelo Gordon; the Villa Florence later that year to AWH Partners and The Roxborough Group; The Marker last July to an affiliate of Stockdale Capital Partners for $77 million, or $370,000 per room; and Hotel Spero last August to an affiliate of Fairwood Capital for $71 million, or $380,000 per room.
But Pebblebrook, now owner of eight hotels in San Francisco, has expressed confidence throughout the pandemic in the city’s economic turnaround. In 2021, it sank $25 million into renovating the Hotel Vitale, now the 1 Hotel San Francisco at 8 Mission Street.
Jon Bortz, CEO of Pebblebrook, has been bullish in earnings calls on San Francisco’s long-term prospects — even as its deteriorating public image led him and Park Hotels & Resorts CEO Thomas Baltimore to fly out to the city and meet with Mayor London Breed to discuss homelessness and high-profile property crimes.
He came away encouraged, according to the Business Times.
Pebblebrook still maintains a presence on Fisherman’s Wharf, with its 361-room Hotel Zephyr Fisherman’s Wharf at 250 Beach Street.
— Dana Bartholomew