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Park Hotels & Resorts Inc. Announces Cessation of Payment on $725 Million Non-Recourse CMBS Loan Secured By Two of Its San Francisco Hotels
Park Hotels and Resorts ^ | 6-5-23 | Park Hotels and Resorts

Posted on 06/05/2023 6:01:20 PM PDT by dynachrome

Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE:PK) today announced that, starting in June, it ceased making payments toward the $725 million non-recourse CMBS loan which is scheduled to mature in November 2023, and is secured by two of its San Francisco hotels—the 1,921-room Hilton San Francisco Union Square and the 1,024-room Parc 55 San Francisco. The Company intends to work in good faith with the loan’s servicers to determine the most effective path forward, which is expected to result in ultimate removal of these hotels from its portfolio.

“This past week we made the very difficult, but necessary decision to stop debt service payments on our San Francisco CMBS loan,” commented Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer of Park. “After much thought and consideration, we believe it is in the best interest for Park’s stockholders to materially reduce our current exposure to the San Francisco market. Now more than ever, we believe San Francisco’s path to recovery remains clouded and elongated by major challenges – both old and new: record high office vacancy; concerns over street conditions; lower return to office than peer cities; and a weaker than expected citywide convention calendar through 2027 that will negatively impact business and leisure demand and will likely significantly reduce compression in the city for the foreseeable future

(Excerpt) Read more at pkhotelsandresorts.com ...


TOPICS: Business/Economy; Society
KEYWORDS: california; hotel; nonpayment; sanfrancisco; sanfransicko
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To: Svartalfiar

You don’t know if it were an amortized loan or a balloon loan.

This was a business decision. They didn’t give anything up.


41 posted on 06/06/2023 10:44:26 AM PDT by Fido969 (45 is Superman! )
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To: Fido969

True. But even with a balloon loan, that’s a significant devaluation on the properties, especially for their size and deep inside a major city. Not a good sign for SanFran at all


42 posted on 06/07/2023 6:06:37 AM PDT by Svartalfiar
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