When the Community Finance Corporation (CFC) acquired the Grand Hyatt San Antonio from Hyatt in 2022 for $406m, it is understood to have been the first transition of a US hotel from balance sheet ownership to a municipal bond financing structure.
Community Finance Corporation is a nonprofit real estate developer that creates public – private partnerships offering an alternative to traditional finance.
CFC typically participates in the financing and development of prisons, fire stations, police facilities, and student housing on behalf of municipalities and state governments, implementing low interest and tax-exempt bond financing.
The 1,003-room Grand Hyatt San Antonio serves most of the city’s group events and was built in 2008 directly adjacent to the Henry B. Gonzalez Convention Center, which is owned and operated by the City of San Antonio.
The City also owns the land the hotel sits on, and during the pandemic it experienced shortfalls in occupancy tax revenue and ground-lease payments, putting a strain on municipal finances.
When CFC bought the hotel building, which continues to be managed by Hyatt, CHMWarnick was engaged in its capacity as a leading hotel asset manager and owner-advisory firm.
“This wasn’t just about asset managing. It was about safeguarding a public investment and delivering value for bondholders, the City of San Antonio, and the community,” said Dan Walsh, senior vice president of CHMWarnick.
Value creation
CHMWarnick’s target was to restore performance to pre-pandemic levels and then exceed them; to optimise guest segmentation and the mix between group and transient business to drive long-term RevPAR and GOP growth; and ultimately to reposition the hotel as a market leader while meeting bond repayment obligations ahead of schedule.
Walsh said his team began with a thorough assessment of operations to identify opportunities and inefficiencies.
“Through robust reporting and monitoring systems, we maintained clear visibility into performance, enabling timing and data-driven decision-making,” he said. “We worked closely with the Hyatt management team, fostering alignment and collaboration to ensure everyone moved towards a shared vision.”
The approach to capital planning and execution ensured that resources were deployed efficiently with a strong focus on ROI.
The hotel has several F&B outlets including the Tejas Lounge serving Texas cuisine, Moda Fare’s Italian offering, and Ruth’s Chris Steak House, known for its custom-aged prime steaks. Food and beverage repositioning initiatives elevated the guest experience and profitability.
Staff optimisation strategies allowed labour to be more closely aligned to changes in demand while all the time maintaining service quality.
Walsh added: “Our commitment to ESG initiatives reinforced the long-term value and sustainability of the asset.”
Quantifiable success
Thanks to this disciplined programme, the hotel exhibited significant improvements in 2024, not only compared to CHMWarnick’s own targets but also its Texas-based competitor set.
Against CHMWarnick’s targets, the hotel reported a seven percent increase in total revenue per available room (TrevPAR) from $229.15 to $245.42.
Food and beverage margin was up 790 basis points (bps); operating cost margin was down 200 bps; undistributed expenses margin dropped 240 bps; and GOP margin was up by 440 bps.
Performance data comparing 2024 with 2019 provided by hotstats showed that the Grand Hyatt San Antonio trumped its Texas competitor set of similar big box hotels with an increase in gross operating profit per available room (GOPPAR) of 26.5 percent against an average 18.6 percent for its competitors. Its GOP margin increased by 12.6 percent compared to just two percent for the comp set.
Thanks to the uplift in financial performance at the hotel, more than $10m in bond repayments were made years ahead of schedule, said Walsh.
“From day one, we had a clear mandate to protect the investment, enhance performance and ensure the hotel’s operation supported the City of San Antonio’s broader economic and tourism goals,” he commented.
Highlighting the hotel’s innovative public - private partnership model, he said: “The success of the Grand Hyatt San Antonio demonstrates that entities can effectively own and operate high performing bond finance convention center hotels, and it truly sets a benchmark for similar structures moving forward.”
Walsh thanked the Community Finance Corporation and the Grand Hyatt team “for the opportunity to collaborate on such a remarkable asset.”
CHMWarnick currently asset manages a portfolio of more than 50 hotels across the US with a combined asset value of approximately $12bn.
All quotes taken from the IHIF NYU 2025 session: ‘Unlocking value: HAMA US Asset Management Achievement Award’