By Alex Girda, Associate Editor
The California hospitality market recently saw a major boost when the first hotel facility to be developed in the city’s core in a number of years was announced. Now, a major acquisition deal was completed for one of the most high-profile hotels in the city of San Francisco. InterContinental Hotels Group PLC has completed the sale of its flagship property in the Bay Area, the InterContinental Mark Hopkins San Francisco. The buyer is a joint venture created by affiliates of Woodridge Capital Partners and funds managed by Oaktree Capital Management LP. The purchase fee for the hotel property stood at $120 million in gross cash proceeds.
InterContinental San Francisco will remain under the management of IHG under a long-term contract with the new owners. The facility was completed in 1926 and entered the InterContinental brand after 47 years. Now-seller IHG acquired the lessee interest 10 years after it started managing the property, and in 2010, acquired the freehold. The sale is a sign of the company’s decision to sell three of its hotels over the past year, in a bid to reduce the capital intensity of its operations. IHG has already completed the sale of its InterContinental London Park Lane back in May 2013, a press statement shows, while the offloading of another major asset, namely the Continental New York Barclay, is almost completed.
The buying joint venture will invest a further $20 million in improving the facility, in an attempt to reposition the property. According to a press statement announcing the transaction, in 2013, the hotel generated $42 million in revenue, and, at the end of 2013, the net book value of the facility stood at $90 million.
Image courtesy of intercontinentalmarkhopkins.com