Aug. 28, 2023 (SFChronicle.com)
A major hotel investor is making a multimillion-dollar bet on San Francisco’s tourism recovery with the renovations and rebrandings of four San Francisco hotels, including a cluster of three on troubled Seventh Street in South of Market.
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Oxford Capital Group is finishing work on new bathrooms and guest rooms, lobbies and installing new air conditioning systems and furniture. It is also renovating the Hotel Vertigo in Lower Nob Hill, one of the filming locations for the acclaimed 1958 Alfred Hitchcock movie of the same name.
The three Seventh Street hotels will start reopening in September, with new bars and restaurants planned next year. They’re all within two blocks of the San Francisco Federal Building, where drug dealers and users congregate daily. Government workers were told this month to work remotely due to safety concerns. On Friday, there were four tents on Mission Street outside one of the hotels, and another five on nearby Minna Street.
But Oxford is undeterred and believes the new hotels will help revitalize the area adjacent to the long-struggling Mid-Market district, even as other real estate owners and retailers in the area flee.
“We’re going to take back Seventh Street,” said George Jordan, president of Oxford Hotels & Resorts, Oxford Capital’s hotel operator subsidiary. “We know exactly what we’re up against. We know what we’re getting into. We’re not wearing rose-colored glasses.”
“San Francisco has been through fires, earthquakes, the dot-com burst, Y2K and the pandemic. It’ll get through fentanyl,” he said. “I think San Francisco’s on the nadir and we’re on the way back up.”
The hotels’ rebrandings and new features include:
- The 152-room Americania Hotel at 121 Seventh St. will reopen as SoMa House in September. New amenities include a fitness center, heated outdoor pool and courtyard. A new sports-themed gastropub called SoMa Social is set to open in early 2024, with further plans to add a rooftop space.
- The 121-room Good Hotel at 112 Seventh St. will reopen as the Hotel Garrett in September. A 3,500-square-foot restaurant and bar will open in 2024.
- The 48-room Carriage Inn Best Western at 140 Seventh St. will reopen as the Hotel Fiona in September.
- The 110-room Hotel Vertigo at 940 Sutter St. in Nob Hill will reopen as the Hotel Julian in mid-October. Though the hotel is shedding its Vertigo name, a two-story wine bar named Carlotta’s, after one of the movie’s characters, is set to open in early 2024.
Daily room rates in September range from $179 to $429 across the SoMa hotels, according to their websites.
San Francisco Business Times first reported the planned reopenings.
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The reopening of the three South of Market hotels will restore around 100 union hotel jobs. The Hotel Julian will add around 40 additional non-union jobs when it reopens.
Oxford bought the four hotels from local owners in 2019 as San Francisco enjoyed a record-breaking year of tourism. The pandemic crushed the industry, but Oxford was able to fill three of the hotels for almost three years by enrolling in the city’s shelter-in-place program for the homeless.
But tenants damaged the hotels during the shelter program, leading Oxford and other owners to file millions of dollars in claims against the city. The city approved a nearly $3.4 million payout in April to settle damages at Hotel Vertigo, and Oxford said all claims have been resolved.
The hotels have been closed for around nine months during renovations.
Oxford believes the Seventh Street hotels will benefit from easy access to the Civic Center BART Station and from being three blocks from conventions at Moscone Center.
The openings also come as few San Francisco hotel owners are investing in their properties. Only one other new hotel is scheduled to open this year, the former Le Meridien, which will now be called the Jay.
“We’re growing. We’re investing in our hotels,” said Sar Peruri, chief operating officer of Oxford Capital Group. “We’ll be differentiated.”
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San Francisco tourism has continued to bounce back in 2023, but a full return to pre-pandemic levels isn’t expected for a few years, according to the city’s tourism bureau.
Oxford purchased five additional Bay Area hotels in 2020, including the King George Hotel, Hotel Griffon and the Inn at Union Square in San Francisco. Business has been improving and the hotels are profitable, though they aren’t back to pre-pandemic levels and San Francisco still lags other U.S. cities, Jordan said. Still, he’s encouraged by positive market trends.
The 40,000-person Dreamforce conference is returning next month just as Oxford’s hotels start reopening, followed by the high-profile Asia-Pacific Economic Cooperation summit in November.
But convention activity is projected to drop in 2024, with confirmed convention hotel room bookings down more than a third compared to this year. That’s a major reason that another hotel investor, Park Hotels & Resorts, is walking away from ownership of two of the city’s biggest hotels, Parc 55 and Hilton San Francisco Union Square.
Oxford met recently with San Francisco Sheriff Paul Miyamoto, who detailed public safety efforts in the SoMa area, and the company said it feels supported by local officials.
“This is going to be a joint public-private effort,” said Peruri. “The moment that we’re open … what that’s going to do is immediately increase foot traffic and energy.”
Reach Roland Li: roland.li@sfchronicle.com; Twitter: @rolandlisf
Written By Roland Li
Roland Li covers commercial real estate for the business desk, focusing on the Bay Area office and retail sectors.
He was previously a reporter at San Francisco Business Times, where he won one award from the California News Publishers Association and three from the National Association of Real Estate Editors.
He is the author of “Good Luck Have Fun: The Rise of eSports,” a 2016 book on the history of the competitive video game industry. Before moving to the Bay Area in 2015, he studied and worked in New York. He freelanced for the Wall Street Journal, the New York Times and other local publications. His hobbies include swimming and urban photography.
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