One of the biggest hotel real estate investment trusts in the country, Park Hotels & Resorts, is leaving two properties in the downtown area of San Francisco, claiming it lacks faith in the city’s capacity to overcome “major challenges.” It closed two of San Francisco’s major downtown hotels, saying the city’s streets are unsafe and expressing doubts about the area’s ability to recover.
The 1,921-room Hilton San Francisco and the 1,024-room Parc 55 San Francisco are two of Park Hotels’ San Francisco property, and together they are securing a $725 million loan for the company.
Park Hotels CEO Thomas J. Baltimore Jr. said regarding the matter said “This past week we made the very difficult, but necessary decision to stop debt service payments on our San Francisco CMBS loan. After much thought and consideration, we believe it is in the best interest for Park’s stockholders to materially reduce our current exposure to the San Francisco market.” He even added”Now more than ever, we believe San Francisco’s path to recovery remains clouded and elongated by major challenges — both old and new: record high office vacancy; concerns over street conditions; lower return to office than peer cities; and a weaker than expected citywide convention calendar through 2027 that will negatively impact business and leisure demand and will likely significantly reduce compression in the city for the foreseeable future,”.
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