LaSalle Hotel Properties has formally announced the previously talked about acquisition of Hotel Vitale in San Francisco for $130 million. The purchase price rivals that of The Ritz-Carlton, San Francisco, which was bought last July by Thayer Lodging for $161 million.
As it happens, on a per-key basis, the 200-room Hotel Vitale cost more to acquire than the 338-room Ritz-Carlton, coming in at $650,000 per key, The Ritz-Carlton, San Francisco at $476,331.
The waterfront-located Hotel Vitale is located at 8 Mission Street at the intersection of the Embarcadero Waterfront and the Financial District, across from the Ferry Building Marketplace. Demand generators include the some 21 million square feet of existing office space and 3.5 million square feet of new office development within six blocks of the hotel.
"We are thrilled with this acquisition," said Michael D. Barnello, president and CEO of LaSalle Hotel Properties. "Hotel Vitale is outstanding physically and in terms of its location. The hotel is surrounded by demand generators that attract corporate and leisure business. "We are also excited about increasing our presence in San Francisco." In August, LaSalle acquired the 236-rooom Serrano Hotel in San Francisco for $71.5 million.
"Room demand is at peak levels and supply growth is expected to be limited for the next several years," continued Barnello, "which bodes well for owners and operators. Market performance has been strong and we are pleased to have acquired our sixth hotel in San Francisco."
Hotel Vitale opened in 2005, and has had a reported $6.5 million in subsequent capital expenditures, including restaurant upgrades and new guestroom furniture. The hotel's guestrooms average 375 square feet and include eight suites.
The hotel was purchased subject to a ground lease with the City & County of San Francisco, Municipal Transportation Agency, which expires on March 8, 2070. The hotel will be managed by Commune Hotels and Resorts, which also manages the Company’s Gild Hall hotel in New York.
LaSalle Hotel Properties owns 46 hotels currently in the upscale segment, totaling approximately 11,600 guestrooms in 10 states and the District of Columbia.