TYSONS, Va.--(BUSINESS WIRE)--Park Hotels & Resorts Inc. (“Park”) (NYSE:PK) today announced that it has closed on the sale of the 182-room Ace Hotel Downtown Los Angeles (the “Hotel”) located in Los Angeles, CA, for gross proceeds of $117.0 million, or $643,000 per key before customary closing costs. When adjusted for Park’s anticipated capital expenditures (“capex”), the sale price represents a 5.4% capitalization rate on the Hotel’s projected 2019 net operating income, or 16.0x the Hotel’s projected 2019 EBITDA. Proceeds from the sale of the Hotel will be used to repay a portion of Park’s unsecured indebtedness in order to delever Park’s balance sheet.
“We are very pleased to announce the successful execution of our 20th non-core asset sale, which helps deliver on our stated objective of reducing leverage following our recent acquisition of Chesapeake Lodging Trust,” commented Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer of Park. “We have now sold approximately $1 billion in assets since our formation less than three years ago, taking advantage of strong buyer interest and our deep relationships with the investment community in order to achieve our strategic goals. We remain confident in our ability to deliver on our near-term objectives of upgrading the quality of the portfolio while also maintaining a low-levered balance sheet, which will serve us well in all phases of the lodging cycle.”
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements related to Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, the effects of competition and the effects of future legislation or regulations, and other non-historical statements. Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements and Park urges investors to carefully review the disclosures Park makes concerning risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual Report on Form 10-K for the year ended December 31, 2018, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
About Park Hotels & Resorts
Park Hotels & Resorts Inc. (NYSE: PK) is the second largest publicly traded lodging real estate investment trusts with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio currently consists of 63 premium-branded hotels and resorts with over 34,000 rooms primarily located in prime U.S markets with high barriers to entry. For additional information, please visit Park's website at www.pkhotelsandresorts.com.
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