New Orleans. Photo by Shutterstock.
TYSONS, VA—Park Hotels & Resorts has closed on the sale of the 410-room Le Meridien New Orleans for $84 million, or $205,000 per key before customary closing costs. The REIT plans to use the proceeds to repay part of its unsecured debt.
When adjusted for Park's anticipated capital expenditures, the sale price represents a 5% capitalization rate on the hotel's projected 2019 net operating income.
Including the sales of the Conrad Dublin and the Ace Hotel Downtown Los Angeles, Park has now sold three assets in the fourth quarter 2019 for pro rata gross proceeds of $262 million. Net proceeds from these sales as well, will be used to pay down its debt.
Chairman and CEO Thomas J. Baltimore, Jr., notes that with the sale of the Le Meridian New Orleans, the REIT has now sold 22 non-core assets for $1 billion since its spin off from Hilton. The sale of these non-core assets is part of its strategic plan to improve the quality of its portfolio by exiting international and slower growth domestic markets, he adds.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
