Park Hotels & Resorts Inc. Announces Lawsuit Related to $725 Million Non-Recourse CMBS Loan Secured By Two of its San Francisco Hotels

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.”