Park Hotels & Resorts divests Hilton Nuremberg for $17.5M

The sale price of the Hilton Nuremberg represents a 3.5-percent capitalization rate on the hotel’s 2018 net operating income. Photo credit: Hilton

Lodging REIT Park Hotels & Resorts has closed on the sale of the 152-room Hilton Nuremberg in Germany for $17.5 million ($115,000 per key). The buyer was not disclosed.

When adjusted for Park’s anticipated capital expenditures of $10.1 million for the property, the sale price represents a 3.5-percent capitalization rate on the hotel’s 2018 net operating income (5.6 percent, excluding capital expenditures). 

The REIT has now sold 15 non-core assets for nearly $590 million over the past 18 months. Nearly a year ago, the trust sold the 601-room Hilton Berlin for approximately $350 million. 

Virtual Roundtable

Post COVID-19: The New Guest Experience

Join Hotel Management’s Elaine Simon for our latest roundtable—Post COVID-19: The New Guest Experience. The experts on the panel will share how to inspire guest confidence that hotels are safe and clean and how to win back guest business.

Proceeds from the latest sale will be used for general business purposes, which may include funding future capital projects. 

According to Park's Chairman/CEO Tom Baltimore Jr., the transaction reduces the REIT's international exposure to three hotels, accounting for approximately 1 percent of hotel adjusted EBITDA. 

"The sale also further improves the overall quality of our portfolio, as the hotel’s 2018 RevPAR was $105, or 40 percent below our portfolio average. We remain laser-focused on reshaping our portfolio and maximizing value for our stockholders and anticipate executing on additional asset sales in the future," said Baltimore.

Park’s portfolio consists of 51 branded hotels and resorts with more than 30,000 rooms in the United States.

Suggested Articles

Demand came in 67,000 rooms lower during the week ended July 4 than the previous week, according to Jan Freitag, STR’s SVP of lodging insights.

The In-Seat Contactless Platform is meant to give guests touch-free control over food and beverage at hotel restaurants.

As the economy slowly begins to right itself, hotels can look toward an unexpected way to save on operating costs: their trash.