TYSONS, Va.--(BUSINESS WIRE)--Park Hotels & Resorts Inc. (“Park”) (NYSE:PK) today announced that it has closed on the two separate sales of the 197-room Embassy Suites by Hilton Washington DC Georgetown (the “Embassy Suites DC”) and the 503-room Hilton São Paulo Morumbi (the “Hilton São Paulo”) for combined gross proceeds of approximately $208 million before customary closing costs and adjustments.
The Embassy Suites DC, located in Washington, D.C., was sold for gross proceeds of $90.4 million, or $459,000 per key before customary closing costs and adjustments. When adjusted for Park’s anticipated capital expenditures (“capex”), the sale price represents a 5.9% capitalization rate on the Hotel’s 2019 net operating income (6.3% excluding capex), or 14.8x the Hotel’s 2019 EBITDA (13.8x excluding capex).
The Hilton São Paulo, located in São Paulo, Brazil, was sold for gross proceeds of $117.5 million, or $234,000 per key before customary closing costs and adjustments. When adjusted for Park’s anticipated capital expenditures, the sale price represents a 5.8% capitalization rate on the Hotel’s 2019 net operating income (6.6% excluding capex), or 14.9x the Hotel’s 2019 EBITDA (13.1x excluding capex).
“We are excited to announce the sale of two non-core assets that advance our strategic objectives at very attractive pricing,” commented Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer of Park. “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 non-core 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. I am very proud of our capital recycling efforts and the progress we have made toward our portfolio transformation.”
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 trust with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio currently consists of 60 premium-branded hotels and resorts with over 33,000 rooms 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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