Host Hotels Floats Sale of Grand Hyatt San Francisco

Host Hotels & Resorts may be looking to sell the Grand Hyatt San Francisco hotel in Union Square.

The Maryland-based real estate investment trust is exploring the sale of more than 10 hotels valued at $1 billion, which include the 669-room Grand Hyatt at 345 Stockton Street, Bloomberg and the San Francisco Business Times reported.

Host is soliciting bids for the 36-story Hyatt, as well as the W Seattle and the Coronado Island Marriott near San Diego.

Lodging demand has stabilized after sharp declines at the dawn of the pandemic and a rapid rebound afterward, according to Bloomberg.

Investors are expecting more hotel deals this year as greater certainty around the cost of borrowing gives buyers and sellers more confidence in hotel values.

Host, based in Bethesda, controls the 1,500-room San Francisco Marriott Marquis, the city’s second-largest hotel, with a ground lease through 2046 that has a potential 30-year extension.

The firm also owns the 285-room San Francisco Marriott Fisherman’s Wharf.

Host Hotels CEO Jim Risoleo told investors on a November earnings call the company would likely test the market on “non-core” assets he described as “good hotels but not a long-term fit for the portfolio given the direction that we have moved in over the last seven or eight years.”

“If pricing is attractive, we’ll sell,” Risoleo told investors. “If it’s not, we’ll pull back and invest in the assets ourselves.”

Last year, Host bought several luxury hotels, including 1 Hotel-branded properties in New York and Nashville, and the Turtle Bay Resort in Hawaii.

The Grand Hyatt San Francisco was built in 1972 as the Hyatt on Union Square. Host purchased the Grand Hyatt in 2018 from Hyatt Hotels in a deal that included the 301-room Andaz Maui at Wailea Resort and the 454-room Hyatt Regency Coconut Point Resort and Spa in Florida, according to the Business Times.

Host Hotels, formerly Host Marriott, was spun off from Marriott International in 1993, and claims to be the largest third-party owner of Marriott and Hyatt hotels. As of Dec. 31, the world’s largest lodging REIT owns 77 hotels with 42,000 rooms in 20 U.S. cities, according to its website. Marriott International is also headquartered in Bethesda.

— Dana Bartholomew