TYSONS, Va., June 01, 2022 (GLOBE NEWSWIRE) -- Park Hotels & Resorts Inc. (“Park”) (NYSE:PK) announced that it has entered into a definitive agreement with affiliates of Sunstone Hotel Investors, Inc. (“Sunstone”) (NYSE:SHO) for Park to sell its 25% interest in the joint venture owning the 1,190-room Hilton San Diego Bayfront (the “Hilton Bayfront”) to Sunstone for a sale price of $102 million plus Park’s allocated share of reserves and working capital.
The sale price represents a $628 million valuation for the Hilton Bayfront, or approximately $528,000 per key, after accounting for the $220 million secured loan in place on the asset. The sale price represents a 6.5% capitalization rate on the hotel’s 2019 net operating income, or 13.4x the Hotel’s 2019 EBITDA. The closing will be subject to customary closing conditions and third-party consents.
“We are pleased to announce the disposition of our 25% interest in our Hilton Bayfront joint venture,” commented Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer of Park. “While the Hilton Bayfront is a superb asset with a promising future, the right path for Park is to exit this minority interest at a fair price and redeploy capital toward other corporate uses including debt reduction, share repurchases, and ROI opportunities within our portfolio. Upon the completion of our sale of the Hilton Bayfront joint venture interest, we will have sold or disposed of 34 assets for over $1.8 billion since our spin-off from Hilton. I am incredibly proud of our ongoing capital recycling efforts and the progress we have made toward our portfolio transformation.”
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements related to Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, including expected dates that its hotels will break even or achieve positive Hotel Adjusted EBITDA, the impact to the Company's business and financial condition and that of its hotel management companies, measures being taken in response to COVID-19, the impact from macroeconomic factors (including inflation and geopolitical conflicts), the effects of competition and the effects of future legislation or regulations, the expected completion of anticipated dispositions, the declaration and payment of future dividends and other non-historical statements. Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “hopes” or the negative version of these words or other comparable words. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could materially affect its results of operations, financial condition, cash flows, performance or future achievements or events. Currently, one of the most significant factors continues to be the adverse effect of COVID-19, including actions taken to contain the pandemic or mitigate its effects, the emergences of virus variants and resurgences, on the Company’s financial condition, results of operations, cash flows and performance, its hotel management companies and its hotels’ tenants, and the global economy and financial markets. Investors are cautioned to interpret many of the risks identified in the risk factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as being heightened as a result of the ongoing and numerous adverse effects of COVID-19.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements and Park urges investors to carefully review the disclosures Park makes concerning risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual Report on Form 10-K for the year ended December 31, 2021, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
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 52 premium-branded hotels and resorts with approximately 32,000 rooms primarily located in prime city center and resort locations. Visit www.pkhotelsandresorts.com for more information.
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