Tom Baltimore: Yes. A few things, Bill. I mean, obviously, you and I could probably could spend an afternoon talking about it. I think what happened in San Francisco is a sort of the narrative got away from them. I think we all saw at NAREIT that city conditions were better than I think people expected. No doubt they’re lagging. And I think you know I’ve been out there as much as anybody. But I think in fairness, there are some embedded advantages to San Francisco. The — just the geography, the beauty, I don’t need to share that with you. But when you think about the education base, when you think about what’s happening in the technology space. If you look at what’s happening in the AI, there’s 6 times the money being spent in AI out in San Francisco than any other market in the country.
So look, a lot of the uniforms were getting money and spending like drunken sailors, those days are over. So you’re going to see that market right size, but the foundation of venture capital of that innovation, it still is going to be a very important part of that growth. And then don’t forget and lose sight of close connection to Asia, that will reconcile at some point. It may take a little while. And as we pointed out, that spend of that Asian traveler really nearly 3 times what we see on the domestic side. So there are fundamental benefits, I think, to be encouraged over the intermediate and long-term. We’re not pollyannish about this. We’ve been living through this like no one else given the fact that we’ve got, obviously, that 3,000-room complex, that’s really the big drag.
Once you get that anchored in that recovery, given the operating leverage, it could come back faster than people realize. You probably heard the New York story I gave, right, where we were 55% in the first quarter and up 2% in the fourth quarter. None of us would have predicted that. I’m not sure that was in your crystal ball and your crystal ball is probably as good as anybody. So I wouldn’t write it off. It’s source of frustration, I think, for many, but safety security is important. You’ve got to have political leadership, but you also have to have business leaders. And I think the women and men leaders there are also stepping up. So you’re seeing them far more engaged, as you talk about tax incentives, other incentives to reimagine the city.
So it’s going to take time. It’s not going to happen in €˜23, but I do think the foundation can be laid and some things to be encouraged about in €˜24, €˜25. The fundamental issue for us is do we believe that the intrinsic value of that real estate is higher than the debt. And the debt is at $250 a key or inside of $250 a key. We sold a Law Meridian for north of $600,000 a key in the middle of the pandemic. So we believe there’s embedded value here, and you’re not going to be adding a lot more hotel product in San Francisco particularly with the market with 32,000 rooms. You’re not going to see what happened in New York with the onslaught of all the select service hotels that peppered and undermine the market, you’re not going to see that in San Francisco.
So there’s some fundamental benefits there that over the intermediate and long term. Today, painful, but we certainly believe that worth hanging in there. And as we said, we’re going to carefully study how we’re going to refinance it, but we’ll get it done like we’ve gotten everything else done through the worst of it through the pandemic and through the recast last year. I think we’ve demonstrated time and time that it’s a very experienced team and we know how to handle it.
Bill Crow: Well. I appreciate the time as always. Thank you, Tom.
Tom Baltimore: Thank you.
Operator: And our next question comes from the line of Jay Kornreich with SMBC. Please proceed with your question.
Tom Baltimore: Hey, Jay.
