BETHESDA, Md.—Pebblebrook Hotel Trust announced that it has acquired the Radisson Hotel Fisherman’s Wharf and Retail for $132 million. The 355-room hotel, which includes approximately 44,000 square feet of street retail space, is located in the heart of Fisherman’s Wharf in San Francisco, Calif. The property will be managed by Davidson Hotels and Resorts.
“We’re very pleased with our acquisition of the Radisson Hotel Fisherman’s Wharf and Retail, located in one of San Francisco’s strongest submarkets,” said Jon Bortz, chairman and chief executive officer of Pebblebrook Hotel Trust. “This hotel benefits from an excellent location in the heart of Fisherman’s Wharf, which is reflected in the hotel’s consistently high occupancy levels and strong cash flows.”
The hotel’s immediate area along Jefferson Street is currently undergoing a $4.0 million beautification project, creating a pedestrian-friendly, outdoor plaza experience directly in front of the property, improving the experience for the over 25,000 people who visit the area each day.
Originally built in 1964 as a 250-room hotel with 14,000 square feet of retail space, the hotel expanded in 1999 with the construction of an additional 105 rooms and 30,000 square feet of retail space. The hotel was updated by a comprehensive $4.5 million renovation in 2012, offering contemporary guestrooms and a refreshed lobby. The hotel also features 1,720 square feet of meeting space and a newly renovated fitness center. The hotel’s guestrooms offer remodeled bathrooms, new Sleep Number beds, 37-inch flat-screen TVs, upgraded lighting, and contemporary décor.
In 2013, the Radisson Hotel Fisherman’s Wharf is forecasted to operate at 89 percent occupancy, with an average daily rate of $184, room revenue per available room of $165, earnings before interest, taxes, depreciation and amortization (EBITDA) of $11.9 million, and net operating income after capital reserves (NOI) of $11 million. The property’s retail space is currently 95 percent leased with an average rent per square foot over $100.
The company will own a leasehold interest in the property through a ground lease, which currently has 48 years remaining and expires in 2062.
Pebblebrook plans to invest $18-$20.0 million between 2014 and 2015 in a complete renovation and repositioning of the hotel, including all guestrooms and public areas, both interior and exterior. The property’s design will be overseen by Dawson Design Associates, the same design team that repositioned the company’s Hotel Zetta, also in San Francisco. The hotel’s comprehensive guestroom and public area improvements are expected to commence in the fourth quarter of 2014 and the company plans to rename the property upon completion of the renovation.
“We are very excited about the opportunity to reposition the Radisson Hotel Fisherman’s Wharf to an upper upscale boutique hotel,” noted Bortz. “We believe this type of product will be positively received in the vibrant Fisherman’s Wharf market and the comprehensive renovation and repositioning plan that will touch all aspects of the hotel will provide a new and unique guest experience.”
The acquisition of the Radisson Hotel Fisherman’s Wharf and Retail brings the total number of properties in the Company’s portfolio to 29, marks the Company’s fifth investment in San Francisco