Pebblebrook Hotel Trust, among the largest hotel owners in San Francisco, is unloading its fourth property in 14 months with the sale of the landmark Hotel Spero near Union Square.
The Maryland-based real estate investment trust is close to finalizing the sale of the 236-room hotel at 405 Taylor St., the San Francisco Business Times reported. The buyer is an affiliate of Fairwood Capital, based in Memphis. Terms of the sale were not disclosed.
A liquor license application revealed the deal for the 99-year-old boutique hotel, according to the newspaper.
Thomas Defreece, a vice president and controller of Fairwood Capital, and Fairwood founder Robert Todd Solmson, are managing members. The applicant for various hotel licenses is a limited liability corporation with a Fairwood headquarters address.
Pebblebrook bought Hotel Spero in 2018 with its $5.2 billion purchase of LaSalle Hotel Properties, which acquired the Spanish Colonial building once known as the Hotel Californian for $69 million in 2013 from Massachusetts Mutual Life Insurance.
At the beginning of the coronavirus pandemic in 2020, the publicly traded REIT owned a dozen hotel properties in San Francisco, making it the largest hospitality company in town. Then it began to offload properties.
In September, the Bethesda-based investor sold the 189-room, century-old Villa Florence in Union Square for $87.5 million, or $462,963 per key.
In April 2021, Pebblebrook sold the 416-room, century-old Kimpton Sir Francis Drake Hotel for $157.6 million, after paying $90 million for it in 2010.
The latest sale price came to around $377,000 per key, in line with the recent deal for the Villa Florence. The Kimpton St. Francis Drake has since been renamed the Beacon Grand.
This month, it sold the century-old, 208-room The Marker Hotel near Union Square, down the street from Hotel Spero, for $77 million, or $370,192 per key.
Pebblebrook’s sell-offs were offset by luxury resort acquisitions in Georgia and Florida. The owner of the most hotel rooms in San Francisco, Virginia-based Park Hotels & Resorts, has also shrunk its footprint with the sale last year of the 360-room Le Meridien San Francisco and the 171-room Hotel Adagio, according to the Business Times.
[San Francisco Business Times] — Dana Bartholomew
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