The Hilton Financial District in San Francisco has defaulted on its loan, the latest major commercial failure and a sign of continuing crisis in the city’s retail and tourism sectors.
The San Francisco Chronicle reported Friday:
The owner of the Hilton Financial District at 750 Kearny St. said Wednesday that it defaulted on a $97 million loan, according to a securities filing. Portsmouth Square Inc.’s affiliate Justice Operating Company LLC was issued the notice of default for the 544-room hotel.
…
In the third quarter of 2023, the most recent data available, the Hilton Financial District reported $11.1 million in revenue, down from $12.3 million from the third quarter of 2022. The hotel had a net operating loss of $1.56 million in the most recent third quarter.
…
San Francisco tourism has rebounded partially from the worst of the pandemic but the 2024 convention calendar is lighter than it was in 2023, which is a challenge for big business-oriented hotels. Some events have left the city for cheaper places like Las Vegas. That’s a drag on a key tax revenue source for the city, which is facing a deficit of around $800 million over the next two fiscal years.
Retail flight from the city began in earnest in late 2021, when mass looting hit Union Square, triggering a national phenomenon but also reinforcing a sense of despair about the state of downtown San Francisco.
The city has had the slowest post-pandemic recovery of any major U.S. city, and has been beset by homelessness, open-air drug abuse, and crime.
