Fisherman's Wharf Hotel Goes Back to Lender

The keys for a tourist hotel at San Francisco’s Fisherman’s Wharf are going back to the lender after the owner defaulted on an $85M mortgage loan backed by the property.

DiNapoli Capital Partners, based in Walnut Creek, CA, has handed over the deed for the 248-room Alton hotel by Kimpton at Fisherman’s Wharf, located at 2700 Jones Street in a deed in lieu of foreclosure filed in San Francisco.

A Minneapolis-based affiliate of AB CarVal Investors took back the hotel. AB CarVal and Ramsfield Hospitality Finance sponsored an $85M mortgage loan for the Alton in March 2022, according to a report in the San Francisco Business Times.

The Alton is anchored by a Michelin Guide- and James Beard-recognized Filipino-American restaurant Abaca.

A DiNapoli affiliate acquired the hotel property, also known as the Kimpton Alton, in 2018 for about $45M. The Kimpton Alton operates half of a former 585-room, two-building Holiday Inn at Fisherman’s Wharf.

Westbrook Partners bought the Holiday Inn property in 2017 and sold half of it to DiNapoli. Westbrook converted the other half of the property into the Caza Hotel.

Kimpton, a San Francisco boutique unit of InterContinental Hotels Group, took over as manager of the Alton in the spring of 2021 after a renovation, the report said.

The post-pandemic momentum of a recovery in tourism that has lifted hospitality markets in other major markets has been “stunted” in San Francisco, according to the latest hospitality market report from Marcus & Millichap.

“The metro’s hospitality sector is enduring a unique set of challenges amid record-high office vacancy, a slow return of international travelers from Asia, concerns over safety in the city, and recent tech industry headwinds,” M&M’s report said.

Conditions in the downtown area, including safety concerns, have led to the cancellation of several major conferences that were scheduled to take place this year at the Moscone Center, the city’s convention venue.

Moscone Center events have an estimated 409,000 hotel rooms under contract for 2024, compared to 664,000 in 2023 and nearly 1M in pre-pandemic years.

M&M is forecasting that the shrinking convention schedule will be “partially offset by improving international tourism, helping occupancy reach 70% in 2024.” The report projects that both occupancy and daily rates will climb this year in San Francisco, boosting RevPAR to about $169, which is still about 17% lower than pre-pandemic levels.