Blackstone to Pay $279M for San Francisco Hyatt Hotel
The transaction for this 821-key property is expected to close this summer.
Sunstone Hotel Investors has entered into a definitive agreement to sell the 821-key Hyatt Regency San Francisco hotel to funds affiliated with Blackstone Real Estate for $279 million, or roughly $340,000 per key.
The transaction is expected to close in late July or early August. Hyatt Hotels Corp. will continue to manage the property.
Sunstone acquired the asset in December 2013 for $262.5 million. The Aliso Viejo, Calif.-based REIT invested $50 million in upgrades during the pandemic, adding 19 rooms for the current total of 821, according to SFGATE.com. Sunstone also repaired the former rotating Equinox restaurant at the top of the building, now known as the private Regency Club.
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Located at 5 Embarcadero Center at the foot of Market Street, the hotel was built in 1973. At that time, the Financial District hotel had 802 rooms and was known for its futuristic design, including its 17-story atrium lobby and glass capsule elevators.
Sunstone has deployed nearly $70 million of the anticipated sale proceeds into the discounted repurchase of its common and preferred stock during 2026. The company is evaluating additional opportunities to deploy the remaining proceeds.
Once the sale closes, Sunstone will have 13 hotels in its portfolio, including the Four Seasons Napa Valley in Calistoga, Calif., and the Marriott Long Beach Downtown in Long Beach, Calif.
Eastdil Secured marketed the property and served as the exclusive broker for the sale. J.P. Morgan Securities LLC continues to serve as financial advisor to Sunstone.
Blackstone’s Bay Area growth
The sale of the 20-story waterfront hotel comes as Blackstone continues to expand its holdings in the Bay Area as the region’s hospitality sector continues its AI-driven recovery. Blackstone Mortgage Trust acquired the 686-key Hyatt Regency San Francisco Downtown SoMa in a deed-in-lieu of foreclosure transaction in December 2024 after its owner, Highgate, missed a balloon loan payment. The property is now part of BRE Hotels & Resorts, a Blackstone fund-owned hospitality platform. Other San Francisco hotels in the portfolio include Hilton Garden Inn San Francisco Airport North and Hotel Kabuki. It also owns the Hotel del Coronado near San Diego.
Late last year, Blackstone acquired the 277-key Four Seasons Hotel San Francisco from Westbrook Partners for a reported $130 million. Located on Market Street near Union Square in the Financial District, the hotel is also close to the Moscone Center, which is seeing a rebound in convention business.
This spring, Blackstone bought Stanly Ranch, a 135-key Auberge Collection resort located an hour from San Francisco in Napa Valley, at a foreclosure auction for $195 million, according to HotelDive.com.
Surging hospitality market
The San Francisco hospitality market is seeing significant gains. The city led the nation in RevPAR growth in the first quarter of 2026, up 31 percent year-over-year due to AI-related corporate travel, according to CBRE. The San Francisco Travel Association expects the city to welcome 24.2 million visitors this year, with spending reaching $9.9 billion, exceeding the 2019 record of $9.6 billion. Last year, SFTA reported there were 23.7 million visitors who spent $9.4 billion.
In addition to an increasing number of events and conventions at Moscone Center this year, the FIFA World Cup is underway at Levi’s Stadium in nearby Santa Clara, Calif. Earlier this year, Super Bowl LX was also held at Levi’s Stadium.
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