Dive Brief:
- Park Hotels & Resorts sold the 316-room Hyatt Centric Fisherman’s Wharf in San Francisco for $80 million “despite a challenging transaction market,” the Tysons, Virginia-based real estate investment trust announced last week. The trust declined to disclose the buyer.
- Chairman and CEO Thomas Baltimore said the move was part of Park’s strategy to offload between $300 million and $400 million of “non-core” hotel assets this year to improve the overall quality of Park’s portfolio, reinvest funds in the trust’s ROI initiatives and enhance liquidity.
- The Hyatt Centric sale follows Park’s other moves to offload San Francisco properties amid the market’s sluggish post-pandemic recovery — the slowest among U.S. markets following the COVID-19 pandemic, according to JLL.
Dive Insight:
The sale price of Hyatt Centric Fisherman’s Wharf is valued at $253,000 per key, representing 64 times the hotel’s projected 2024 EBITDA, according to Park.
“Since 2017, Park has sold or disposed of 46 hotels for over $3 billion, meaningfully reshaping our portfolio and strengthening our long-term growth,” Baltimore said in a statement. “We remain laser focused on allocating capital to unlock the embedded value in our portfolio and maximize shareholder returns.”
Last year, Park closed the Hilton Oakland Airport in Oakland, California. And in 2023, the trust ceased loan payments on Hilton San Francisco Union Square and Parc 55 San Francisco.
On an earnings call last year, Baltimore called San Francisco a “challenging market,” noting that ceasing loan payments on the downtown properties “meaningfully improved our balance sheet and operating metrics.”
The two hotels — which were placed in a receivership after Park ceased payments — found an unknown buyer earlier this year, The Real Deal reported in March.
San Francisco’s hotel market, however, could be poised for a “robust recovery,” according to a JLL report released in April.
Per JLL’s report, the market is experiencing rebounding RevPAR and demand driven by an improved convention calendar, resurgence of international travel and events.
The firm expects San Francisco’s recovery will spur further hotel investment in the area, bringing the city closer to speed with demand trends across other U.S. urban markets, which San Francisco has been lagging in recent years.
Earlier this year, JLL’s Zach Demuth told Hotel Dive that 2025 would see more mid-sized deals valued between $50 million and $150 million.
