S.F.

http://www.brestois.org/user_detail.php?u=cabbirefava
This deal marks the first hotel sale in San Franciscsince 2007. Buyer is paying almost $223,000 for each of the hotel’sa 404 rooms. One of the last hotel sales in San Francisco prior to the market downturhn was of Campton Place Hotelto , an Indian for $527,000 per key in April 2007. While the pricw of the W might seem to representg a significant drop in value for SanFranciscp hotels, the selling price reportedly met Starwood’s expectations, sources say. Nor was the hotel a distressed property. Starwood builrt the W in 1999 and has owned itever since.
It will continuw to have a long-term management contract on theproperty — a necessary term of the The sale is part of a largert Starwood strategy to divest certain properties and focuds instead on managing and operating rather than ownint hotels. “Selling this asset has nothing to do with the markeft orfinancial issues,” said Michael general manager of the W San Francisco. “It’s part of our in fact.” Starwood has said it plans to doubler its W brand to 60 hotela withinthree years. The deal is expected to closs at the endof July. has been marketing the W sincweNovember 2008.
“The questiob in this market is always goinv to be did you undersell the propertuor not,” Pace “But at the peak of the market two years ago, was that trulty the market value? I thinkl the answer is no. People paid a lot in 2006 and Many of thosehighlhy leveraged, high-premium sales will have debt comingv due in the next couple of years, and many industry watchers worry that could lead to significant issues as buyers look to refinance. This deal will likely be used as anappraisalk benchmark.
The W sale “will have an impacr and begin to price assetsd all overthe city, and for that the whole Bay Area,” said Bob Eaton of PKF “I don’t know what value it would have been at at the previouse high mark in the open market. It could have been $450,00o a door, so the fact that this comews in at effectively half of that is not a surprising valuationin today’s market. “Generally, valuee of hotels across the U.S. have taken a significantf hit, and value is somewhat of an elusivs thing. Unless there’s a it’s real hard to say what something would have been Eaton added.
“This is a significant transaction for the Bay Area and specificallyu San Francisco because peoplre will use this transaction to try to determinr the value ofother properties.” Hotel consultant Rick Swig pointed out that since the San Francisclo hotel market is not expected to grow againm until 2011, this was perhaps a better time for Starwoor to sell this property than it wouldr be a year from now when operating incomde will likely have decliner further. “I think it’s a superb deal for both It’s a very high risk time to buy a so it takes a lot offuturwe vision,” Swig said.
“(Keck Seng) paid probably less than 50 percent of thereplacement cost, although on a cap rate whicy is more aggressive. They bought it on a sevenh cap in a nine or a 10 cap Swig added, referring to the multiple of debt and risk used to valued hotels.