San Francisco-based Oxford Lodging teamed up with Longwing Real Estate Ventures, the US real estate arm of the Dubai Investment Group, to buy the 77-year-old Sir Francis Drake Hotel on San Francisco's Union Square.
Robert Kline, Oxford Lodging president, declined to discuss the terms of the transaction, but did say the new owners are planning a $20 million renovation of all guestrooms and some public areas, to be completed by 2006. According to Kline, double-paned windows will be installed, the heating and air conditioning systems will be replaced and the bathrooms will be renovated.
The seller was Sir Francis Drake Hotel Associates, a group led by San Francisco-based Kimpton Hotel & Restaurant Group, a hotel investment and management firm. Kimpton will continue to operate the 416-room hotel.
The Sir Francis Drake Hotel was named for the famed explorer who narrowly missed discovering the San Francisco Bay in 1579. Architects designed the hotel with Drake's era in mind, complete with two murals depicting scenes from his life in the hotel lobby. “It has a wonderful landmark appeal,” Kline says.
Kline also notes that the hotel hopes to attract more corporate business as the renovation is completed.
Harry Denton's Starlight Room, a well-known lounge on the top floor of the hotel, will remain. Earlier this summer, Denton added Drinking the Stars, a $650 cocktail, to the bar's menu. The drink features Chateau de Ravignan 1979 Armagnac infused with Madagascar vanilla beans, orange peels and raisins complete with a chaser magnum of Dom Perignon.
“We made a bet on San Francisco's recovery two years ago,” Kline says, referring to Oxford's purchase of the Pan Pacific Hotel, a 338-room luxury hotel also on Union Square. The firm acquired the hotel alongside Goldman Sachs' 2001-vintage Whitehall fund in 2003.
In March, Oxford also worked with Longwing in the $122 million acquisition of the Adam's Mark Jacksonville in downtown Jacksonville, Florida. The 966-room hotel was purchased from the HBE Corporation and was quickly re-branded as the Hyatt Regency Jacksonville Riverfront. It is slated for a $10 million guestroom renovation, to be completed next year.