Santa Fe Financial Corporation, through its subsidiaries, owns and operates a hotel property in San Francisco, California. The company is a subsidiary of The InterGroup Corporation.
The company’s principal source of revenue is derived from the management of its 68.8% owned subsidiary, Portsmouth Square, Inc. (Portsmouth). Portsmouth’s primary business is conducted through its general and limited partnership interest in Justice Investors Limited Partnership (Justice or the Partnership), a Califo...
Santa Fe Financial Corporation, through its subsidiaries, owns and operates a hotel property in San Francisco, California. The company is a subsidiary of The InterGroup Corporation.
The company’s principal source of revenue is derived from the management of its 68.8% owned subsidiary, Portsmouth Square, Inc. (Portsmouth). Portsmouth’s primary business is conducted through its general and limited partnership interest in Justice Investors Limited Partnership (Justice or the Partnership), a California limited partnership. Portsmouth controls approximately 93.3% of the voting interest in Justice and is the sole general partner of Justice. Justice, through its subsidiaries Justice Operating Company, LLC (Operating) and Justice Mezzanine Company, LLC (Mezzanine) owns and operates a 544-room hotel property located at 750 Kearny Street, San Francisco California, known as the Hilton San Francisco Financial District (the Hotel) and related facilities, including a five-level underground parking garage. Mezzanine is a wholly owned subsidiary of the Partnership; Operating is a wholly owned subsidiary of Mezzanine. Mezzanine is the borrower under certain mezzanine indebtedness of Justice, and in December 2013, the Partnership conveyed ownership of the Hotel to Operating. The Hotel is operated by the partnership as a full-service Hilton brand hotel pursuant to a Franchise License Agreement with HLT Franchise Holding LLC through January 31, 2030.
Justice has a Hotel management agreement (HMA) with Interstate Management Company, LLC (Interstate) to manage the Hotel, along with its five-level parking garage, with an effective takeover date of February 3, 2017. The term of the management agreement is for an initial period of ten years commencing on the takeover date and automatically renews for successive one year periods, to not exceed five years in the aggregate, subject to certain conditions. Under the terms of the HMA, base management fee payable to Interstate shall be one and seven-tenths percent (1.70%) of total Hotel revenue. In October 2019, Interstate merged with Aimbridge Hospitality, North America’s major independent hotel management company. With the completion of the merger, the newly combined company would be positioned under the Aimbridge Hospitality name in the Americas.
The company also derives rental income from two multi-family, residential rental properties located in the Los Angeles area. It also derives income from the investment of its cash and investment securities assets. The company has invested in income-producing instruments, equity and debt securities and would consider other investments if such investments offer growth or profit potential.
In addition to its Hotel and real estate operations, the company invests from time to time in income producing instruments, corporate debt and equity securities, publicly traded investment funds, mortgage backed securities, securities issued by REITs and other companies, which invest primarily in real estate.
Seasonality
Historically, the Hotel’s operation have been seasonal under normal circumstances. The Hotel maintained high occupancy and room rates during the entire year (year ended June 30, 2020) except for the weeks starting from Thanksgiving to the end of the calendar year due to the holiday season.
History
The company was founded in 1967. It was incorporated in the state of Nevada in 1967. The company was formerly known as Tri Financial Corporation and changed its name to Santa Fe Financial Corporation in 1970.