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REIT buys Clift Hotel for $120 million

An affiliate of Hospitality Properties Trust has reportedly bought Clift Hotel, located in San Francisco, for US$120 million from Tarsadia Investments.

According to a CoStar report, the property’s title deed was transferred to Hospitality Properties Trust, Newton, Massachusetts, on December 31. The 363-room hotel is currently leased by Morgans Hotel Group, New York City.

Neither Hospitality Properties Trust, Tarsadia Investments nor Morgans Hotel Group responded to requests for comment from HOTELS.

Morgan’s annual lease to Tarsadia was US$6 million, according to SEC filings, an amount set to increase every five years by as much as 40%.

“The hotel’s performance has improved significantly due to the strong San Francisco lodging market, but profitability remains challenged,” David Loeb, an analyst with R.W. Baird & Co. wrote in a note to investors. “In 2011, the hotel posted US$220 ADR, 79.5% occupancy, US$175 RevPAR and 14.5% hotel EBITDA margins. Hotel EBITDA margins peaked at 18.2% in 2008.”

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