Braemar selling San Francisco asset for $115M

SAN FRANCISCO —Dallas-based REIT Braemar Hotels & Resorts Inc. has entered into a definitive agreement to sell the 410-key The Clancy in San Francisco for $115 million ($280,487 per key) and has received a $3.5 million non-refundable earnest money deposit from the undisclosed buyer. 

The sale price represents a 5% capitalization rate based on the net operating income for the trailing 12 months ended in August 2025. The transaction is expected to close in November, subject to customary conditions. The buyer has the right to extend the closing for 30 days with an incremental $1 million non-refundable deposit.  Braemar also said it provides no assurances that the sale will be completed on these terms or at all.

“We are strategically refining our portfolio with one clear objective: to maximize its value for our shareholders,” said Richard J. Stockton, president and CEO. “This divestiture will help us to ensure that a future sale of the company results in the best possible outcome for our investors.”

Potential Braemar sale

In August, the REIT’s board of directors said it was initiating a process for the immediate sale of the company, which includes nine resorts and five urban properties. The luxury hotel REIT said it doesn’t believe it “can flourish in today’s market environment.”

Hotel REITs are currently suffering from a public-private disconnect in terms of their relative values. This disconnect especially puts pressure on REITs with luxury assets, like Braemar, which feels its portfolio’s value isn’t reflected in its stock price.

Private equity could be a likely buyer for a lot of Braemar’s properties, while high-net-worth individuals or groups could be potential buyers for the trophy asset-type of properties, which include the REIT’s California Wine Country assets (like the Bardessono Hotel and Spa or the Hotel Yountville, both in Yountville, California).

A challenge for Braemar is that there’s a lot of leverage for buyers, especially with what the final value for the REIT’s stock price ends up being, Michael Bellisario, an analyst for RW Baird, told Hotel Investment Today last month.

“It almost feels like it’s a giant game of Tetris because the longer the process takes, you would think that means it’s more likely that it’s getting broken up, but also there’s risk to that,” he said.