Highgate and Flynn Properties Buy Hotel on Nob Hill

Highgate and Flynn Properties have purchased the historic Huntington Hotel on San Francisco’s Nob Hill, with plans for a ground-up restoration. The purchase price was not disclosed.

The Texas-based Highgate and San Francisco-based Flynn bought the shuttered Roaring 20s-era property at 1075 California Street, the San Francisco Chronicle reported.

The firms said they plan to “restore and elevate every aspect” of the 135-room hotel, “returning it to its original glory while reestablishing it as the single finest luxury hotel in San Francisco.”

The joint venture acquired the 12-story hotel after purchasing its $56.2 million mortgage from Deutsche Bank. The loan fell into delinquency under the Huntington’s former owner, Los Angeles-based Woodridge Capital.

The new owners declined to say what it cost them to buy the loan.

However, Flynn Properties CEO Greg Flynn told the San Francisco Business Times it was less than the full value of the loan debt, which had increased with late penalties.

At the foreclosure auction last week, Flynn and Highgate submitted a nominal reserve bid for $29 million — a portion of the debt it was owed — to take title of the property. It’s not clear if that represents the full purchase price. There were no other bidders.

The Huntington aims to reopen in 2025. The massive renovation will extend to the guest rooms and public areas, Big 4 Restaurant and Nob Hill Spa. It will remain a union hotel and continue to be managed by Highgate.

The Georgian-style hotel was built as an apartment building in 1922 as the first brick-and-steel high-rise in the West. It was converted into a hotel two years later. It has some of the city’s largest rooms, at an average 581 square feet, compared with the standard 200 square feet.

The hotel is famous for its Big 4 Restaurant, named after the “Big Four” business tycoons of the era: Collis Huntington, who also gave the hotel its name; Leland Stanford; Charles Crocker; and Mark Hopkins, who has a prominent hotel named for him down the street.

The Huntington is home to the 11,000-square-foot Nob Hill Spa, which offers one of the city’s few indoor pools. The hotel, restaurant and spa have all been closed since April 2020.

Flynn told the Business Times it was the hotel’s three-year closure that enabled the discount from market price, making it “basically a COVID buy that took a little longer to play out.” It also made the scope of upgrades feasible.

“There has been some reinvestment in the hotel in the past but not as deeply as it needs to be to compete at the very highest level,” Flynn said. “We’ve bought it at a basis that allows us to put in the very significant investment it will take to bring it there. You couldn’t do that otherwise.”

Woodridge had sunk $100 million into the Huntington, according to Flynn, when factoring in the previous owner’s mezzanine debt above its first mortgage and another $13 million plowed into the hotel through the pandemic. It bought the hotel for $87 million in 2018.

In order to be successful, the new owners will need to do what their predecessors haven’t done in nearly two decades: turn a profit. The Huntington hasn’t made money since 2005.

Flynn’s group instead believes it can position the Huntington as the city’s most sought-after luxury hotel, restoring it to the status of its earliest days.

“The idea is for a guest who is coming to San Francisco, and can afford to stay anywhere, chooses here,” Flynn said.

Flynn Properties’ holdings include the Carneros Resort and Spa, and Solage, both in Napa Valley. Highgate owns the Stanford Court Hotel on the eastern slope of Nob Hill, along with the Newbury Boston, and the Knickerbocker Hotel and Park Lane Hotel in New York City.