Another blow is being dealt to downtown San Francisco. The investment firm that owns Hilton San Francisco Union Square and Parc 55 hotels is walking away from its debt and surrendering them to its lender.allows you to see news throughout the day."The Company intends to work in good faith with the loan's servicers to determine the most effective path forward, which is expected to result in ultimate removal of these hotels from its portfolio.
The 1,921-room Hilton San Francisco Union Square is the city's largest hotel, occupying an entire city block. Parc 55 has 1,024 rooms. The firm cited the continued debt burden of the two hotels on its portfolio and multiple factors that have made the San Francisco market less desirable for their business."This past week we made the very difficult, but necessary decision to stop debt service payments on our San Francisco CMBS loan," commented Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer of Park.
Ultimately removing the loan and the hotels will substantially improve our balance sheet and operating metrics, as net leverage is reduced by nearly a full turn, while 2022 Comparable RevPAR and Comparable Hotel Adjusted EBITDA Margin as compared to 2019 would improve approximately 800 basis points and 230 basis points, respectively.