Blackstone Mortgage Trust lists 686-key Hyatt Regency SF SoMa
A lender turned owner taking hotel product back to market is a live read on where hospitality basis is resetting.
Blackstone Mortgage Trust has put the 686-key Hyatt Regency San Francisco Downtown SoMa up for sale, less than two years after taking the hotel back from its prior owner through a deed-in-lieu of foreclosure. CEO Tim Johnson disclosed the plan on the REIT’s July 30 second-quarter earnings call, and Eastdil Secured is marketing the property with no asking price disclosed.
Why it matters
BXMT is one of commercial real estate’s largest balance-sheet lenders, so a decision to sell rather than hold its own repossessed hotel is a signal for anyone pricing hotel debt or equity right now. The trust took the SoMa property back from operator Highgate Hotels in December 2024 after Highgate defaulted on the loan tied to the asset. Marketing it now, instead of continuing to hold and operate through the workout, tells developers and investors that a major lender sees enough buyer demand to exit at a basis it is comfortable disclosing to shareholders, even without a public price tag yet.
The numbers
The hotel is one of 14 real-estate-owned assets on BXMT’s books, carried at a combined $1.4 billion as of the second quarter, according to the company’s 10-Q filed with the SEC. Johnson called the San Francisco hotel “one of our largest assets” and pointed to “the sharp fundamental recovery and increasing investor demand in that market” as the reason to sell now. Company leadership also said it is evaluating bringing more properties to market this year as part of the broader push, though no additional assets have been named. Our national capital markets coverage is tracking how lender-owned hotel product is being repriced across the country.
What’s next
Watch for an asking price once Eastdil formally circulates the offering, and for which of BXMT’s other 13 REO assets follow the SoMa hotel to market. The REIT has said proceeds get recycled into new lending, mostly residential, industrial and net-lease deals, rather than held for future hotel investment, a signal that hospitality is not where BXMT wants fresh balance-sheet exposure even as it argues the market is recovering.