Park Hotels & Resorts closed on the sales of two hotels last month: the 182-room Ace Hotel Downtown Los Angeles and the 410-room Le Méridien New Orleans. It sold the hotels for $117 million and $84 million, respectively.
The sales price of the Ace Hotel Downtown Los Angeles represented a 5.4 percent capitalization rate on the hotel’s projected 2019 net operating income, or 16 times its projected 2019 earnings before interest, tax, depreciation and amortization. The sales price of the Le Méridien New Orleans represented a 5 percent capitalization rate on the hotel’s projected 2019 net operating income, or 17.1 times its projected 2019 EBITDA. Park Hotels plans to use proceeds from both sales to repay a portion of its unsecured indebtedness.
“With the sale of the Le Meridian New Orleans we have now sold, or otherwise disposed of, 22 non-core assets for $1 billion since our spin from Hilton as we continue to make progress against our strategic plan to improve the quality of our portfolio by exiting international and slower growth domestic markets,” Thomas J. Baltimore Jr., chairman/CEO of Park Hotels & Resorts, said in a statement.
The company owns 62 hotels and resorts with more than 34,000 rooms.