Park Hotels & Resorts Inc. (NYSE:PK) last week announced that it has closed on the sale of the 563-room Pointe Hilton Squaw Peak Resort located in Phoenix, AZ, for gross proceeds of $51.4 million, or $91,200 per key before customary closing costs.
When adjusted for Park’s anticipated capital expenditures (“capex”) of $28 million for the Hotel, the sale price represents a 5.2% capitalization rate on the Hotel’s projected 2018 net operating income (8.0% excluding capex), or 13.9x the Hotel’s projected 2018 EBITDA. Proceeds from the sale will be used for general business purposes, which may include funding future capital projects.
This latest transaction represents the 14th hotel that Park has sold over the prior year and exemplifies Park’s strategy of further improving the overall quality of its portfolio by recycling out of non-core hotels. In 2018, RevPAR at the Hotel is estimated at $118, or approximately 30% below the portfolio average.
“I am thrilled with the progress we have made on capital recycling, having sold a total of 14 hotels over the last 11 months for gross proceeds of $570 million—improving portfolio RevPAR by over $6, while dramatically reducing Park’s exposure to international markets. We remain laser-focused on reshaping our portfolio and maximizing value for our stockholders and anticipate executing on additional asset sales in the future,” commented Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer of Park.