A pair of San Francisco hotels seen as symbols of the city’s commercial real estate slump have changed hands.

Newbond Holdings and Conversant Capital acquired the nearly 3,000-room Hilton San Francisco Union Square and Parc 55 for $408M, a roughly 75% discount from the buildings' 2016 valuation. The properties together represent more than 8% of San Francisco’s total hotel inventory.

The hotels had been in receivership since 2023, when Park Hotels & Resorts stopped making payments on the $725M loan tied to the assets, citing record office vacancies, poor street conditions and a weak convention calendar.

That loan had grown to $874M with accrued interest and fees as of Oct. 31, according to Park. With the sale closed, Park said in a press release that it can now remove all remaining loan-related items from its financial statements.

The deal arrives amid a run of major hospitality investments downtown. Blackstone acquired the Four Seasons Hotel for $130M earlier this month. Sixth Street picked up The Clancy Hotel for $115M.

Conditions are improving for hotels in San Francisco, which saw huge drop-offs in visits when the pandemic took hold. Costar reported a 43% bump in revenue per available room and lodging demand up double digits.

San Francisco’s hotel market showed signs of life earlier this year with the announcement of a proposed 41-story, 574-foot skyscraper including a hotel with between 100 and 200 rooms.

The partnership between the city of San Francisco and Related California would occupy a prime location, at 447 Battery St. and 530 Sansome St., spanning an entire city block right across from the Transamerica Pyramid. It would be the first new five-star hotel built in the city in 20 years.