TYSONS, Va., Oct. 26, 2023 (GLOBE NEWSWIRE) — Park Hotels & Resorts Inc. (NYSE: PK) (“Park” or the “Company”) announced today that the trustee under the $725 million non-recourse CMBS loan (“Loan”), by and through its special servicer, filed a lawsuit against the borrower entities related to the cessation of payments on the Loan. In connection with the lawsuit, the trustee requested the appointment of a receiver to take control of the hotels securing the Loan – the 1,921-room Hilton San Francisco Union Square and the 1,024-room Parc 55 San Francisco. Once appointed by the court, the receiver will have complete and exclusive control and possession of the hotels and will maintain Hilton and its workforce to manage the ongoing operations at the hotels. In addition, if appointed by the court on the terms stipulated between the special servicer and the borrowers, the receiver will have the ability to market the hotels for sale and have until September 1, 2024 to consummate a transaction, subject to a 60-day extension if the hotels are under contract by September 1, 2024. As further stipulated between the special servicer and borrowers, if the hotels are not sold within the predetermined sale period then the receiver will no longer have the authority to sell the hotels and the receivership will end with a non-judicial foreclosure. The Company anticipates appointment of a receiver will occur within the next few business days.
Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer, stated, “Today’s filing and anticipated appointment of a receiver is a positive step forward. The receivership will place control of the hotels as well as the benefits and burdens of their operations with the trustee and the court-appointed receiver. As the San Francisco market continues to face an elongated recovery, we believe the transfer of control and ultimate transfer of title to the hotels is in the best interest of our shareholders. While final resolution of the Loan may not occur until sometime next year, be it through sale or foreclosure, today’s filing will allow Park to move forward without enduring the economic impact of these assets and the Loan. We have been working with the servicer in good faith since June and will continue to cooperate and assist as the receiver requests to effectuate an acceptable outcome for all stakeholders in this difficult but necessary process.”
Park expects to provide an update on the lawsuit and anticipated receivership as well as further details about any impacts to guidance and dividends that may result from the appointment of a receiver in its earnings release and during its earnings call in early November.
The filings in the lawsuit (Civil Case Number CGC-23-609935) are available from the court at this link https://sf.courts.ca.gov/online-services/case-information.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements related to the anticipated effects of Park’s decision to cease payments on its $725 million CMBS loan and the effects of the lender’s exercise of its remedies, including placing such hotels into receivership, as well as Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, including anticipated repayment of certain of the Company’s indebtedness, the completion of capital allocation priorities, the expected repurchase of the Company’s stock, the impact from macroeconomic factors (including inflation, increases in interest rates, potential economic slowdown or a recession and geopolitical conflicts), the effects of competition and the effects of future legislation or regulations, the expected completion of anticipated dispositions, the declaration and payment of future dividends and other non-historical statements. Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements and Park urges investors to carefully review the disclosures Park makes concerning risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual Report on Form 10-K for the year ended December 31, 2022, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
About Park Hotels & Resorts
Park is one of the largest publicly-traded lodging REITs with a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio, exclusive of the Hilton San Francisco Union Square and the Parc 55 San Francisco currently consists of 43 premium-branded hotels and resorts with over 26,000 rooms primarily located in prime city center and resort locations. Visit www.pkhotelsandresorts.com for more information.
For more information, contact:
Ian Weissman
Senior Vice President, Corporate Strategy
571-302-5591
iweissman@pkhotelsandresorts.com
For additional information or to receive press releases via e-mail, please visit our website at
www.pkhotelsandresorts.com
