$150M Refinancing Secured for the Iconic Fairmont San Francisco

Main Photo: The Fairmont San Francisco

Date: January 2021

Location: San Francisco, California, USA

Name: The Fairmont San Francisco

No. of Keys: 606

Owner: An affiliate of Korea’s Mirae Asset Global Investments, secured a five-year, non-recourse loan through United Overseas Bank. 

Listed on the National Register of Historic Places, the Fairmont first opened in 1907 and is famously known for hosting every U.S. President since William Howard Taft, celebrities and also for being the first hotel in the country to offer concierge service.

Mirae Asset Global Investments group bought the hotel in November 2015 for $450 million.

Since then, the Fairmont San Francisco has undergone $16 million in renovations to public areas, guestrooms and infrastructure items. The landmark hotel contains 62 suites alongside traditional guest rooms, over 45,000 square feet of meeting and event space, including a ballroom, retail outlets, fitness centre, business centre, in-room dining and premier restaurants such as Laurel Court Restaurant & Bar and Tonga Room & Hurricane Bar.

The hotel re-opened in September after suspending operations in April due to the pandemic.

Mirae Asset Global Investments was founded in Korea and now operates worldwide across 12 markets, and were contenders to take Strategic hotels from China’s Anbang, until Covid bought about payment issues in May 2020.

Finance Broker: JLL Hotels & Hospitality announced today that it has arranged a $150 million refinancing for the 606-key, historic Fairmont San Francisco. 

“This transaction is one of several recent closings that illustrates the increased availability of debt for high-quality hotels with strong sponsorship and good pre-COVID performance,” said Kevin Davis, a Senior Managing Director in JLL’s Hotels & Hospitality Group, where he heads the Hotel Investment Banking team nationally.

“Despite the challenges faced by the hotel sector, this financing opportunity was well-subscribed at various leverage levels,” noted Mike Huth, an Executive Vice President with JLL’s Hotel Investment Banking team. “Ultimately, our client opted for a lower leverage loan with a much lower interest rate.”

JLL’s Hotel Investment Banking team is in the market with over $1 billion in hotel financing requests, and the closing of this transaction is illustrative of the recovering hotel debt market dynamics as outlined in the latest Hospitality Debt Market Commentary.

THPT Comment: Good to see further confidence in hotel’s worth, in the USA and elsewhere, in the banking sector…

First Seen: JLL press release

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