S.F.

http://www.nectaroftheuniverse.com/cold_laser.php
This deal marks the first hotel sale in San Franciscisince 2007. Buyer is paying almost $223,000 for each of the hotel’d 404 rooms. One of the last hotel sales in San Francisco prio r to the market downturn was of Campton Place Hote lto , an Indian for $527,000 per key in April 2007. Whils the price of the W might seem to represent a significant drop in value for SanFranciscoi hotels, the selling price reportedly met Starwood’s expectations, sources say. Nor was the hote a distressed property. Starwood built the W in 1999 and has ownefd itever since. It will continue to have a long-termj management contract on theproperty — a necessary term of the deal.
The sale is part of a largerf Starwood strategy to divest certain properties and focuss instead on managing and operating rather thanownin hotels. “Selling this asset has nothiny to do with the markeyt orfinancial issues,” said Michael Pace, generalo manager of the W San “It’s part of our growth, in fact.” Starwoosd has said it plans to doublse its W brand to 60 hotelsw within three years. The deal is expected to clos at the endof July. has been marketing the W sinceNovember 2008.
“The questionm in this market is always going to be did you undersell the propertyor not,” Pace “But at the peak of the market two years ago, was that truly the market value? I thinm the answer is no. People paid a lot in 2006 and Many of those highly leveraged, high-premium sales will have debt comingg due in the next couple of and many industry watchers worry that could lead to significant issuess as buyers look to refinance. This deal will likelu be used as an appraisal benchmark. The W sale “will have an impact and begi to price assets all overthe city, and for that the whole Bay said Bob Eaton of PKF Capital.
“II don’t know what value it woulr have been at at the previous high mark in the open It could havebeen $450,000 a door, so the fact that this comesz in at effectively half of that is not a surprisingg valuation in today’s market. values of hotels across the U.S. have takej a significant hit, and value is somewhatf of an elusive Unless there’s a transaction, it’sa real hard to say what something would have been Eaton added. “This is a significant transactiob for the Bay Area and specifically San Franciscoo because people will use this transaction to try to determinde the value ofother properties.
” Hotel consultant Rick Swig pointede out that since the San Francisco hotel market is not expected to grow again until 2011, this was perhaps a betted time for Starwood to sell this property than it woule be a year from now when operating income will likely have declinex 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 of future Swig said.
“(Keck paid probably less than 50 percent of the replacement although on a cap rate which is more They bought it on a seven cap in a nine or a 10 cap Swig added, referring to the multiplwe of debt and risk used to value