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May 11, 2021updated 13 May 2021 2:53pm

Park Hotels & Resorts to divest two US properties for $149m

Park Hotels & Resorts has reached a definitive contract to divest two of its properties in the US for $149.0m.

The two assets include the 210-room Hotel Indigo San Diego Gaslamp Quarter located in San Diego, California and the 204-room Courtyard Washington Capitol Hill Navy Yard in Washington, DC.

Both the hotels were purchased by self-advised lodging real estate investment trust (REIT) Chesapeake Lodging Trust.

In September 2019, Park acquired Chesapeake Lodging Trust in a transaction valued at approximately $2.5bn.

Park chairman and chief executive Thomas Baltimore Jr said: “The sale of these two hotels represents our on-going commitment to reduce net leverage and better position our portfolio for long-term, sustainable growth.

“Year to date, we have announced a total of $173m of asset sales and are confident about achieving our targeted goal of $300m to $400m of asset sales in 2021.”

The transaction is expected to complete in the coming 45 days to two months. The company will leverage the proceeds from the sale to repay debt.

Excluding capital expenditures, the deal price represents a 7.4% capitalisation rate on 2019 net operating income.

The divesture comes a few days after Park sold the 97-room W New Orleans – French Quarter located in New Orleans, Los Angeles, for approximately $24.1m.

Currently, Park operates a portfolio of 59 premium-branded hotels and resorts with more than 33,000 rooms.

In January 2017, Hilton Worldwide Holdings completed the spin-off of Park. Since then, Park has divested or disposed of a total number of 27 assets.

The total gross proceeds from these transactions are around $1.4bn.

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