The 93-year-old hotel is located on Sutter Street, one-half block west of the Powell Street cable car line and less than two blocks from Union Square. Hotel amenities include free wireless high-speed Internet access in all guest rooms, free continental breakfast and a wine reception each evening.
Magna and Somera acquired the property in October 2003 from Kimpton Hotels for less than $60,000 per key. The duo invested an additional $22,000 per key to renovate guest rooms and public spaces in 2004.
For Larkspur, which owns 18 hotels in Northern California, Oregon and Washington, the Cartwright Hotel is its first in Downtown San Francisco. Its closest property is a Larkspur Landing-branded "home suite" hotel in South San Francisco.
Several San Francisco hotels have changed hands in recent months, most of them larger properties. In the similar-sized boutique arena, Greystone Hospitality of San Francisco paid $15.25 million, or $246,000 per key for the 62-room Griffon Hotel, one of only three hotels located along the Embarcadero. Room rates for both Cartwright and Griffon are in the $150- to $300-per-night range. An average occupancy comparison was not available.
Recent sales of larger hotel properties include the 360-room Park Hyatt hotel in the Financial District, which sold in early May for about $126 million, or $350,000 per key, and was re-branded a Le Merdien. On April 20, Ashford Hospitality Trust of Dallas acquired the 338-room Pan Pacific San Francisco Hotel for $95 million, or $281,065 per key, and re-branded the property a JW Marriott hotel. At the end of March, the Argent hotel on Third Street between Market and Mission was sold for $178 million, or $258,000 per key, and may be converted to a Westin.
The hotel brokerage firm Atlas Hospitality in September reported that hotel sales volume through the first six months of the year totaled $3.1 billion, which is a 76% increase from 2005. The number of transactions rose by 9% over 2005. "A lot of institutional players are trading and a lot of trophy properties are changing hands, so they are bigger properties," Atlas president Alan Reay told GlobeSt.com last month.
The total number of sales in Northern California was up 18% over last year and San Francisco County claimed the highest increase in dollar volume, up 2,661%. The county also claimed the single largest California sale with a $440-million deal for the Westin St. Francis. "Buyers are…hoping to capitalize on the rising revenues," Reay said. "We're seeing deals sell at five caps and four caps."
Reay foresees a slowing of the pace in 2007. "By then the properties that were going to trade will have traded," he said. "In 2007 we will probably see a dropping off of the dollar volume and a flattening out of the transaction volume."
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