Park Hotels & Resorts has completed the divestment of the 563-room Pointe Hilton Squaw Peak Resort located in Phoenix, Arizona for of $51.4m.
This amount translates to $91,200 per key before customary closing costs.
When adjusted for Park’s expected capital expenditures of $28m for the hotel, the sale price represents a 5.2% capitalisation rate on the hotel’s projected 2018 net operating income (8% excluding capex), or 13.9x the hotel’s projected 2018 EBITDA.
The company plans to use the proceeds from the divestment for general business purposes, which may also include for funding future capital projects.
This is the 14th hotel that Park has sold over the prior year and is part of Park’s strategy of boosting the total quality of its portfolio by recycling out of non-core hotels.
In 2018, RevPAR at the Hotel is estimated at $118, or approximately 30% below the portfolio average.
Park chairman and CEO Thomas Baltimore, Jr said: “I am thrilled with the progress we have made on capital recycling, having sold a total of 14 hotels over the last 11 months for gross proceeds of $570 million—improving portfolio RevPAR by over $6, while dramatically reducing Park’s exposure to international markets. We remain laser-focused on reshaping our portfolio and maximizing value for our stockholders and anticipate executing on additional asset sales in the future.”
Park Hotels & Resorts is a leading publicly traded lodging real estate investment trust with a wide portfolio of hotels and resorts. Currently, its portfolio comprises 52 premium-branded hotels and resorts with over 30,000 rooms located in key US markets.