KHP Capital Partners agreed to acquire Le Meridien San Francisco from Park Hotels & Resorts Inc. (NYSE:PK) for approximately $220 million.
July 12, 2021
Share
KHP Capital Partners agreed to acquire Le Meridien San Francisco from Park Hotels & Resorts Inc. (NYSE:PK) for approximately $220 million during June 2021. Total consideration for this transaction and one other transaction is $303.5 million. Gross proceeds for the Le Meridien San Francisco are $221.5 million, or approximately $615,000/key. Consideration will be payable in cash at closing, subject to customary pro rations and adjustments. In a related transaction, Park Hotels & Resorts agreed to sell 171-room Hotel Adagio, Autograph Collection. When adjusted for Park’s anticipated capex, the sale price equates to a 5.9% capitalization rate on 2019 net operating income (6.5% excluding capex), or 15.0x 2019 EBITDA (13.7x excluding capex). Following the sale of both hotels, Park’s exposure to San Francisco will decrease by 210 basis points to 14.6% based on 2019 pro-forma Hotel Adjusted EBITDA. Transaction is expected to close within the next 60 days. The sale is expected to close during the third quarter of 2021. Net proceeds from the sales will be used to partially repay debt currently outstanding on its one remaining bank term loan, a portion of the 2019 Term Facility. Pro forma for the repayments, Park Hotels expects to have approximately $80 million of corporate bank debt outstanding. Once complete, the transactions will bring the total number of assets sold or disposed of since spinning off from Hilton in January 2017 to 29, with total gross proceeds of approximately $1.7 billion.
Park Hotels & Resorts Inc. is a lodging real estate investment trust (REIT). The Company has a diverse portfolio of hotels and resorts with significant underlying real estate value. Its portfolio consists of 43 premium-branded hotels and resorts with over 26,000 rooms, located in prime United States markets. The Company has two operating segments: consolidated hotels and unconsolidated hotels. Approximately 86% of its rooms are luxury and upper upscale and all of its rooms are located in the United States and its territories. Its portfolio includes hotels in urban and convention areas, such as New York City, Washington, D.C., Chicago, Boston, New Orleans and Denver; and premier resorts in key leisure destinations, including Hawaii, Orlando, Key West and Miami Beach; as well as hotels in select airport and suburban locations. Its brands include Hilton Hotels & Resorts, DoubleTree by Hilton, Signia by Hilton, Hyatt Regency, and others.