Park Hotels & Resorts Executes Definitive Contract to Sell two Hotels for $149 Million; Proceeds to be Used to Further Reduce Leverage

Rhea-AI Summary

Park Hotels & Resorts has announced the sale of two properties for $149 million, equating to about $360,000 per key. The assets include the Hotel Indigo in San Diego and the Courtyard in Washington, D.C., both acquired in 2019. The sale reflects a capitalization rate of 7.0% on 2019 net operating income and allows Park to repay debt. This transaction will increase total asset sales to 27 since January 2017, amounting to approximately $1.4 billion. Management is optimistic about reaching a target of $300-$400 million in asset sales for 2021.

Positive

• Sale of two hotels for $149 million enhances liquidity.
• Proceeds will be used to reduce debt, improving financial stability.
• Continued commitment to asset sales positions company for sustainable growth.
• Targeting $300 million to $400 million in asset sales in 2021, already achieved $173 million year-to-date.

Negative

• None.

TYSONS, Va., May 10, 2021 (GLOBE NEWSWIRE) -- Park Hotels & Resorts Inc. (“Park”) (NYSE:PK) today announced that it has entered into a definitive contract to sell two assets for combined gross proceeds of $149.0 million, or approximately $360,000 per key. The hotels, the 210-room Hotel Indigo San Diego Gaslamp Quarter in San Diego, CA and the 204-room Courtyard Washington Capitol Hill Navy Yard in Washington, DC, were both acquired in September 2019 as part of Park’s acquisition by merger of Chesapeake Lodging Trust.

When adjusted for Park’s anticipated capital expenditures (“capex”), the sale price represents a 7.0% capitalization rate on 2019 net operating income (7.4% excluding capex), or 12.8x 2019 EBITDA (12.2x excluding capex). Proceeds from the sale will be used to repay debt. Management currently expects the transaction to close within the next 45 to 60 days.

Once complete, this transaction will bring the total number of assets sold or disposed of since spinning off from Hilton in January 2017 to 27, with total gross proceeds of approximately $1.4 billion.

“The sale of these two hotels represents our on-going commitment to reduce net leverage and better position our portfolio for long-term, sustainable growth,” commented Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer of Park. “Year to date, we have announced a total of $173 million of asset sales and are confident about achieving our targeted goal of $300 million to $400 million of asset sales in 2021.”

About Park Hotels & Resorts
Park is the second largest publicly traded lodging REIT with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio currently consists of 59 premium-branded hotels and resorts with over 33,000 rooms primarily located in prime city center and resort locations. Visit www.pkhotelsandresorts.com for more information. 

For more information, contact:
Ian Weissman
Senior Vice President, Corporate Strategy
571-302-5591
iweissman@pkhotelsandresorts.com

For additional information or to receive press releases via e-mail, please visit our website at
www.pkhotelsandresorts.com

FAQ

What properties did Park Hotels & Resorts sell for $149 million?

Park Hotels & Resorts sold the Hotel Indigo in San Diego and the Courtyard in Washington, DC for a combined total of $149 million.

What is the capitalization rate for the sale of the hotels?

The capitalization rate for the sale is 7.0% on 2019 net operating income.

How much has Park Hotels & Resorts sold in total since 2017?

Since spinning off from Hilton in January 2017, Park has sold a total of 27 assets for approximately $1.4 billion.

What is Park Hotels & Resorts' asset sale target for 2021?

Park Hotels & Resorts is targeting $300 million to $400 million in asset sales for 2021.