Prime Finance Provides $67M Refi for Historic San Francisco Financial District Hotel
The hotel had defaulted on its debt last year
By Brian Pascus April 2, 2025 1:40 pm
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The InterGroup Corporation and its subsidiary Portsmouth Square have secured $67 million to refinance the Hilton San Francisco Financial District, a 544-room hotel that had defaulted on its $97 million mortgage last year.
Prime Finance provided the loan, which carries an interest rate equal to the Secured Overnight Financing Rate (SOFR) plus 4.8 percent. The loan carries an interest rate cap that limits the SOFR exposure to no more than 4.5 percent and includes a two-year maturity with options for three one-year extensions.
Justice Operating Company, a Portsmouth Square subsidiary, negotiated the terms, while Eastdil Secured arranged the financing.
David Gonzalez, chief operating officer of InterGroup, said in a statement that these agreements and extensions demonstrate his firm’s “dedication to prudent financial stewardship,” after the San Francisco hotel experienced a rough patch.
“This refinancing underscores InterGroup’s ongoing commitment to strategic financial management, enhancing financial stability and operational flexibility across our companies,” said Gonzalez.
Portsmouth Square purchased the hotel in 2013 but defaulted on $97 million of debt tied to the property last January, following the maturity of two loans that were issued by Bank of America (BAC) in 2014, according to CoStar.
The Hilton San Francisco Financial District sits at 750 Kearny Street in San Francisco’s Financial District, a block west of the landmark Transamerica Pyramid. The hotel opened in 1971 on a site that had been the headquarters of the San Francisco Hall of Justice and the San Francisco Police Department from 1896 until 1961.
Standing 27 stories and spanning 323,000 square feet, the hotel was designed by Chinese-American architects Clement Chen and Dartmond Cherk. It features a combination of Brutalist and futuristic architecture that includes both a skybridge and upper floors that flare out in the same manner of an Asian pagoda.
Due to its proximity to Chinatown, the hotel maintains a 20,000-square-foot exhibition hall that is leased by the Chinese Culture Center of San Francisco. The hotel was last renovated in 2006.
Brian Pascus can be reached at bpascus@commercialobserver.com
