Hearst Hotel Auberge
San Francisco, CA
Renovation and transformational adaptive re-use of the iconic Hearst Building into the premier luxury hotel, the Hearst Hotel Auberge Collection, in downtown San Francisco.
Asset Type
Hotel
Redevelopment / Conversion
2024
Scope
125 keys
Key Investment Thesis
The Hearst Hotel will address the market void as the only highly differentiated, A+ location luxury hotel in San Francisco, a chronically undersupplied market for luxury product.
- An irreplaceable location at the corner of 3rd and Market St., landmark building with historic character, and combination of the Hearst and Auberge brands to create an authentic and unique luxury hotel product to fill the market void
- Ability to deliver what will be the most differentiated hotel in the entire San Francisco market in 2026, when San Francisco hospitality is projected to be fully recovered
- Luxury hotels, and the Auberge portfolio in particular, have performed exceptionally well throughout the COVID-19 pandemic and are the hotel segment with the strongest secular trends going forward
JMA Value Creation
As a result of 8 years of pre-development, the project is fully entitled, with thorough due diligence and cost exercises and research completed, under an option to enter into an 85-year ground lease agreement with the Hearst Corporation.
JMA secured a management agreement with world class luxury hotel brand and operator Auberge Hotels
Negotiated ground lease structure with the Hearst Corporation that provides significant flexibility to the investment
Engaged renowned interior designer Roman & Williams to design a truly bespoke and unmatched luxury offering
The project is approved by the National Park Service to receive historic tax credits equal to 20% of the eligible project cost
The project is fully approved – CEQA and City entitlements – and past any appeal periods. The extensive entitlement period is further evidence of significant market barriers to entry.
JMA has been able to significantly diligence the project across all key disciplines, including taking steel beam sample for materials testing to verify the structural design and integrity
