BETHESDA, MD—RLJ Lodging Trust has opened its Courtyard San Francisco Union Square Hotel. The hotel underwent a comprehensive renovation which included adding 16 new rooms.
Located just three blocks from Union Square, the hotel was constructed in 1930 and most recently operated as a 150-room, student housing facility. The company acquired the hotel, formerly known as the Vantaggio Suites Cosmo, in June 2013 and, subsequently, closed the property. After an extensive renovation, it reopened as a 166-room Courtyard by Marriott. The all-in investment of $56.5 million, or approximately $340,000 per key, represents a significant discount to replacement cost. The company expects a forward capitalization rate of approximately 8.6% based on the hotel’s projected 2016 net operating income.
“The repositioning of this asset exemplifies our ability to execute on complex conversion projects to create shareholder value,” commented Thomas J. Baltimore, Jr., president and CEO. “We expect that the hotel’s strong brand affiliation and excellent location in the heart of the city will allow it to capitalize on San Francisco’s strong market fundamentals.”
With the repositioning of the property as a premium branded, focused-service hotel, the company expects this asset to have significant upside and to outperform in this dynamic, growing market.
With the addition of this asset, RLJ Lodging Trust now owns 126 hotels, with approximately 21,000 rooms, located in 22 states and the District of Columbia.