San Francisco, California – Our Investment Property Search took us to the Bay Area, specifically San Francisco, California. Commercial Real Estate Investors can use this Investment Property purchase as an opportunity for a 1031 Exchange. Our Investment Property Search found the Le Meridien Hotel set to close. Chesapeake Lodging Trust is buying this Investment Property, Le Meridien for $143 million. This Investment Property purchase prices equates to approximately $400,000 a room for the 360-room hotel. This Investment Property purchase is expected to close by the end of this year. The San Francisco Bay area is one of the most liquid hotel investment property markets in the Country currently.
This Investment Property is located in the financial district at 333 Battery Street and linked to the four million square-foot mixed-use Embarcadero Center. This is a great area for Business and Tourists, great foot traffic for triple net leased properties. This Investment Property, the 29-story Le Meridien is home to 13,000 square feet of meeting space, a fitness facility and two quality restaurants. Chesapeake Lodging Trust is purchasing this Investment Property, Le Meridien San Francisco, from HEI Hospitality L.L.C.
Some NNN Commercial Real Estate investors believe this Investment Property is being purchased at or near replacement cost. The sale of Le Meridien is the latest example of a national REIT swooping in and buying a San Francisco Hotel Investment Property for top dollar. Some comparable Investment Property purchases as of late are, LaSalle Hotel Properties buying the Hotel Monaco for $68.5 million, about $341,000 per room. Also Pebblebrook Hotel trust bought one of our favorite Investment Properties, the Sir Francis Drake Hotel for $90 million, which is approximately $216,000 per door.
It appears that Chesapeake will finance this transaction, with a hotel-secured $60 million commercial loan to be provided at closing. Capital funding is coming from $45 million borrowed under its revolving credit facility and proceeds from the company’s recent equity offering. Commercial Mortgage Lenders are still ready to fund CTL Financing and large apartment building loans.