Owner Defaults on San Francisco Financial District Hilton Hotel
Posted on 01/17/2024
The InterGroup Corporation is a Delaware corporation formed in 1985, as a successor to Mutual Real Estate Investment Trust, a New York real estate investment trust created in 1965. The Company has been a publicly-held company since M-REIT’s first public offering of shares in 1966 and currently trades on the NASDAQ Capital Market under the symbol: “INTG”. Portsmouth Square, Inc., a 75% subsidiary of The InterGroup Corporation, owns the Hilton San Francisco Financial District, a 544-room hotel located 750 Kearny Street, San Francisco, California, 94108.
Revealed on January 4, 2024, the owner of the 544-room Hilton Financial District hotel at 750 Kearny Street defaulted on a US$ 97 million loan, according to a U.S. securities filing. The loan was originated in 2013 by Bank of America and others. Portsmouth Square Inc.’s affiliate Justice Operating Company LLC was issued the notice of default for the hotel. The company said it has proposed a loan modification agreement that is under review by special servicer LNR Partners. In the third quarter of 2023, the Hilton Financial District reported US$ 11.1 million in revenue, down from US$ 12.3 million from the third quarter of 2022. The hotel had a net operating loss of US$ 1.56 million in the most recent third quarter. In September 2023, the company entered into an agreement with Hart Advisors Group LLC to assist the company in the negotiations of loan modifications for its senior and mezzanine loans with maturity date of January 1, 2024.