QIA Pays $175M for The St. Regis San Francisco
- Dec 05, 2016
San Francisco—And the buying binge continues. Qatar Investment Authority just added another gem to its ever-growing U.S. portfolio with the purchase of The St. Regis San Francisco. The sovereign wealth fund of the State of Qatar acquired the 260-key hotel from Marriott International Inc., in a transaction valued at approximately $175 million.
According to a report released by commercial real estate services firm JLL in 2005—the same year the St. Regis opened its doors—the property cost roughly $130 million to develop.
Located in a 40-story tower topped by residences at 125 3rd St., the Skidmore, Owings & Merrill-designed hotel boasts a premier address, counting the San Francisco Museum of Modern Art as its next-door neighbor. QIA will submit the luxury lodging destination to a renovation program, but there’s something that won’t change; the company signed a long-term agreement for Marriott to stay aboard as manager.
“We have a strong and successful partnership with QIA and we are thrilled that this iconic hotel will expand QIA’s collection of Marriott-branded hotels to the U.S.,” Arne Sorenson, president & CEO of Marriott International, said in a prepared statement.
QIA has spent 2016 acquiring one premier property after another, shelling out more than $2 billion on Class A assets. In two separate transactions with joint venture partner Douglas Emmett Inc., the company took a nearly half-million-square-foot bite out of Los Angeles’ coveted Westside, acquiring the 365,000-square-foot office tower at 12100 Wilshire Blvd. for $225 million before taking its money down the street to 233 Wilshire Blvd., a 129,000-square-foot office building with a purchase price of $139.5 million. QIA dug deep into its pockets to acquire a 9.9 percent interest in Empire State Realty Trust Inc., owner of the renowned 2.8 million-square-foot Empire State Building, through a $622 million investment. And in the first quarter of the year, the company added 1.7 million square feet to its holdings with the acquisition of a four-building portfolio—again, on Los Angeles’ Westside—at a cost of nearly $1.4 billion.
QIA is playing a hefty role in increasing the presence of Middle Eastern investors in U.S. real estate. With a 7.4 percent piece of the pie, Qatar was the fourth largest foreign investor in the market during the first half of 2016, per a report by real estate services firm Marcus & Millichap, following Canada, China and Singapore, which held the first, second and third spots, respectively.
Image courtesy of Starwood Hotels