Chesapeake Lodging Trust (NYSE:CHSP) announced that it has closed on the previously announced acquisition of the JW Marriott San Francisco Union Square for a purchase price of $147.2 million, or approximately $437,000 per key. The Trust assumed the existing management agreement with Marriott International, Inc., as well as the existing ground lease covering the property, which expires in 2083.
“We are delighted to close on the previously announced acquisition of the JW Marriott San Francisco Union Square and further expand our presence in the high-growth San Francisco market,” commented James L. Francis, President and Chief Executive Officer of the Trust. “We believe that San Francisco provides some of the strongest lodging fundamentals in the world and we are excited to grow Chesapeake’s footprint in this incredible marketplace to approximately 1,200 keys. The hotel’s excellent downtown, Union Square location and strong operating fundamentals make this acquisition an outstanding addition to our high-quality portfolio.”
The JW Marriott San Francisco Union Square is a 337-room “Quiet Luxury” brand offered by Marriott International. The iconic 21-story building sits on a prime corner location at Mason and Post in the heart of Union Square and features a 17-story atrium lobby. The hotel contains some of the largest accommodations in San Francisco, including 23 luxury suites that range from 600-1,500 square feet. Each guestroom contains a 42-inch flat screen television, Revive Collection bedding including pillow top mattresses, a Bose radio, wired and wireless HSIA, a generous work area with an ergonomic chair, and floor-to-ceiling marble encased four or five-fixture bathrooms with granite counters and separate tubs.
Guests arrive via the ground level porte-cochere to the first floor entry where a glass elevator transports them to the main lobby on the third floor. The spacious 17-story atrium lobby features guest registration and concierge services, a variety of comfortable seating groups, Level III Restaurant and Bar, and the large “Joie de Danse” bronze sculpture, which is the integral focal point of the lobby design.
Located on the third floor main lobby, the restaurant and bar were redesigned and introduced in 2008 as part of the lobby renovation. The open, flexible space benefits from the soaring atrium and is used as a catering venue for social events up to 175 guests.
The hotel has 12,445 square feet of highly flexible meeting and banquet space throughout 19 different meeting rooms. The diverse mixture of meeting space includes the Metropolitan Ballroom, well-appointed boardrooms and several breakout rooms on the 21st floor with views of the Golden Gate Bridge, and the Pacific Conference Center. The subterranean Pacific Conference Center is quickly becoming a favorite for law groups given its unprecedented level of security and privacy.
The JW Marriott San Francisco Union Square features a large fitness center which was renovated and expanded in 2012. A retail center offering everyday convenience items and healthy snacks is located on the third floor and the hotel also features a full-service business center offering a comprehensive level of services ranging from copy and fax to notary public and overnight delivery services. Parking is provided by valet service with unlimited in and out privileges via the 210-space below grade garage, which is leased to a third party.
“The hotel is in great condition following an approximate $25 million investment since its conversion to the JW brand in 2007,” continued Mr. Francis. “We have some exciting upgrades of our own planned in the coming years to keep this a market leading hotel in Union Square.”
Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service hotels in urban settings or unique locations in the United States. The Trust owns 20 hotels with an aggregate of 6,116 rooms in eight states and the District of Columbia.
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