Park Hotels & Resorts Inc. has announced that it will no longer make payments on a $725-million non-recourse CMBS loan, which is secured by two of its San Francisco hotels: the 1,921-key Hilton San Francisco Union Square and the 1,024-key Parc 55 San Francisco. The loan is set to mature in November.
Thomas J. Baltimore Jr., Chairman and CEO of Park Hotels & Resorts Inc., stated that ceasing payments on this loan would be in the best interest for stockholders due to current challenges facing the market such as record high office vacancy rates; concerns over street conditions; lower return to office than other cities; and a weaker than expected citywide convention calendar through 2027. He added that removing these properties from their portfolio would substantially improve their balance sheet and operating metrics going forward.
The company said they intend to work with servicers of this loan in good faith so as determine an effective path forward resulting in ultimate removal of these hotels from its portfolio..
