Park Hotels & Resorts closes 2 hotel sales

Park Hotels & Resorts closed on two sales for combined gross proceeds of $208 million before customary closing costs and adjustments. The transactions included the sale of the 503-room Hilton São Paulo Morumbi, the real estate investment trust’s last international property.

Park sold the Hilton São Paulo Morumbi in Brazil for $117.5 million, or $234,000 per key. When adjusted for Park’s anticipated capital expenditures, the sale price represents a 5.8 percent capitalization rate on the hotel’s 2019 net operating income, or 14.9 times the hotel’s 2019 earnings before interest, taxes, depreciation and amortization.

The REIT also sold the 197-room Embassy Suites by Hilton Washington DC Georgetown for $90.4 million, or $459,000 per key. When adjusted for Park’s anticipated capital expenditures, the sale price represents a 5.9 percent capitalization rate on the hotel’s 2019 net operating income or 14.8 times the hotel’s 2019 EBITDA.

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“We are excited to announce the sale of two noncore assets that advance our strategic objectives at very attractive pricing,” Thomas J. Baltimore Jr., chairman/CEO of Park, said in a statement. “The sale of the Hilton São Paulo marks our official exit from international markets, and we have now sold or disposed of 24 assets for over $1.2 billion since our spin-off from Hilton, including 14 international assets. In addition, since closing the Chesapeake acquisition in September 2019, we have sold a total of five noncore hotels for gross proceeds of nearly $470 million, executing on our stated strategy of reducing net leverage closer to our targeted goal of low 4x net-debt-to-EBITDA.”

Park Hotels & Resorts owns 60 hotels and resorts with more than 33,000 guestrooms.

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