Park Hotels & Resorts (Park) has agreed to sell two assets for combined gross proceeds of $149 million, or approximately $360,000 per key.
The assets consist of the 210-room Hotel Indigo San Diego Gaslamp Quarter in San Diego, CA and the 204-room Courtyard Washington Capitol Hill Navy Yard in Washington, DC.
The hotels were both acquired in September 2019 as part of Park’s acquisition by merger of Chesapeake Lodging Trust.
”When adjusted for Park’s anticipated capital expenditures (“capex”), the sale price represents a 7.0% capitalization rate on 2019 net operating income (7.4% excluding capex), or 12.8x 2019 EBITDA (12.2x excluding capex). Proceeds from the sale will be used to repay debt. Management currently expects the transaction to close within the next 45 to 60 days,” said the company in a statement.
“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,” commented Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer of Park.
“Year to date, we have announced a total of $173 million of asset sales and are confident about achieving our targeted goal of $300 million to $400 million of asset sales in 2021,” he added.