Park Hotels & Resorts Announces the Sale of the W New Orleans – French Quarter and Provides an Update on Hotel Reopenings a...
April 23 2021 - 6:00AM
Park Hotels & Resorts Inc. (NYSE: PK) (“Park” or the “Company”)
today announced that it has closed on the sale of the 97-room W New
Orleans – French Quarter (the “Hotel”) located in New Orleans, LA,
for gross proceeds of approximately $24.1 million, or $249,000 per
key. When adjusted for Park’s anticipated capital expenditures
(“capex”), the sale price represents a 4.3% capitalization rate on
the Hotel’s 2019 net operating income (5.8% excluding capex), or
17.9x the Hotel’s 2019 EBITDA (13.3x excluding capex). Proceeds
from the sale will be used to repay debt.
The sale of the Hotel marks the 25th non-core hotel that Park
has sold or disposed of since its spin-off from Hilton in January
2017, with gross proceeds from these 25 hotels totaling over $1.2
billion. Since the Company’s acquisition of Chesapeake Lodging
Trust in September 2019, it has now sold six non-core hotels as
part of its ongoing strategy to de-lever its balance sheet and
transform its portfolio.
Operational UpdatePark also announced that the
Company recently reopened three West Coast hotels due to improving
demand trends in their respective markets. The 360-room Le Meridien
San Francisco and the 171-room Hotel Adagio, Autograph Collection,
both located in San Francisco, as well as the 850-room DoubleTree
Hotel Seattle Airport, all reopened in late March. Park now has 52
out of 59 hotels open, accounting for nearly 80% of the Company’s
total room count. The Company’s seven remaining suspended hotels
are currently expected to reopen over the next couple of quarters
as travel restrictions ease and demand recovers.
The Company continues to witness encouraging improvements in
demand, with occupancy at its consolidated hotels increasing from
21% in January to nearly 33% in March, while the portfolio achieved
positive EBITDA in March with nearly half of all open consolidated
hotels generating positive EBITDA. Park’s hotels located in
leisure-oriented destinations or submarkets have recorded strong
increases in leisure demand over the latter half of the first
quarter and into the second quarter. As a result of the recent
strong performance, Park’s monthly burn rate decreased to $26
million in March from the average monthly burn rate of $42 million
the company reported during the fourth quarter 2020.
“I am pleased to announce our first non-core asset sale since
the onset of the COVID-19 pandemic at very strong pricing amidst
encouraging buyer demand for premium, well-located hotels in
markets with high barriers to entry,” stated Thomas J. Baltimore,
Jr., Chairman and CEO of Park. “The sale of the W New Orleans –
French Quarter helps to streamline our portfolio to focus our
resources on our larger assets as well as reduce our exposure in a
market where we already have a strong presence with our 1,622-room
Hilton Riverside hotel. We remain laser-focused on executing on our
strategic priorities, including reopening our hotels, reducing our
burn rate and further de-levering our balance sheet, as we enter a
promising period of demand recovery over the coming months.
Operationally, leisure demand trends continue to improve at a
faster pace than we had initially anticipated, with a broader based
recovery across all demand segments expected over the back half of
2021 and well into 2022.”
About Park Hotels &
ResortsPark 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
WeissmanSenior Vice President, Corporate
Strategy571-302-5591iweissman@pkhotelsandresorts.com
For additional information or to receive press
releases via e-mail, please visit our website
atwww.pkhotelsandresorts.com
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