Park Hotels & Resorts closed on two sales for combined gross proceeds of $208 million before customary closing costs and adjustments. The transactions included the sale of the 503-room Hilton São Paulo Morumbi, the real estate investment trust’s last international property.
Park sold the Hilton São Paulo Morumbi in Brazil for $117.5 million, or $234,000 per key. When adjusted for Park’s anticipated capital expenditures, the sale price represents a 5.8 percent capitalization rate on the hotel’s 2019 net operating income, or 14.9 times the hotel’s 2019 earnings before interest, taxes, depreciation and amortization.
The REIT also sold the 197-room Embassy Suites by Hilton Washington DC Georgetown for $90.4 million, or $459,000 per key. When adjusted for Park’s anticipated capital expenditures, the sale price represents a 5.9 percent capitalization rate on the hotel’s 2019 net operating income or 14.8 times the hotel’s 2019 EBITDA.
“We are excited to announce the sale of two noncore assets that advance our strategic objectives at very attractive pricing,” Thomas J. Baltimore Jr., chairman/CEO of Park, said in a statement. “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 noncore 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.”
Park Hotels & Resorts owns 60 hotels and resorts with more than 33,000 guestrooms.