Park Hotels & Resorts Sells Off $317M in Non-Core Assets
The publicly traded lodging REIT—a spinoff of Hilton Worldwide—divested 11 properties, mostly overseas, significantly reducing its exposure in international markets.
By Scott Baltic, Contributing Editor
Hilton Milton Keynes
Park Hotels & Resorts Inc. has closed on the sale of 11 non-core assets for total gross proceeds of $317 million. The company sold the properties in three separate transactions, which included a portfolio of three Embassy Suites hotels, a portfolio of seven hotels in the United Kingdom and one South African hotel.
The buyers were not disclosed. Park Hotels did not reply to Commercial Property Executive’s request for additional information.
In a prepared statement, Thomas Baltimore Jr., the company’s chairman & CEO, called this transaction part of “executing our stated strategy of recycling capital out of non-core assets with significant expected capex, while dramatically reducing our exposure to international markets.”
He added that since the start of the year, Park has now closed on 12 asset sales totaling nearly $379 million. (The prior sale was the early February sale of the 254-key Hilton Rotterdam, in the Netherlands, for about $62 million).
These latest assets sold, Baltimore noted, have an average RevPAR 36 percent lower than the company’s pro forma RevPAR on a trailing 12-month basis, in addition to which Park will save an estimated $132 million of anticipated capital expenditures over the next few years.
The Embassy Suites portfolio sold for total gross proceeds of about $95.8 million and consisted of the 241-key Embassy Suites Atlanta Perimeter Center in Atlanta; the 236-key Embassy Suites San Rafael Marin County, Calif.; and the 199-key Embassy Suites Kansas City Overland Park in Overland Park, Kan.
The U.K. portfolio sold for total gross proceeds of about $189 million and consisted of the 188-key Hilton London Islington, the 173-key Hilton Bath City, the 184-key Hilton Edinburgh Grosvenor, the 198-key Hilton Belfast, the 278-key Hilton Blackpool, the 138-key Hilton Milton Keynes and the 175-key Hilton Coylumbridge.
The South African hotel is the 327-key Hilton Durban Hotel, which sold for gross proceeds of about $32.5 million.
Newly minted and already reshaping itself
Park Hotels & Resorts is the second-largest publicly traded lodging REIT. Its current portfolio consists of 55 properties totaling more than 32,000 guestrooms: 11 resorts, nine hotels in city centers, seven convention center hotels, 26 airport and other hotels, and five remaining international hotels.
The company came into being barely a year ago, having been created as a spinoff by Hilton Worldwide Holdings Inc., which also spun off its timeshare business, Hilton Grand Vacations, at the same time.
At the time, Hilton President & CEO Christopher Nassetta said, “The new Hilton is a fee-based, capital efficient and resilient business with tremendous growth potential around the world.”
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