Tacorea restaurant owner David Lee describes being mentally drained by the crime wave and says he has received no victim support from San Francisco leadership.
One of the largest publicly traded real estate investment trusts in the United States is planning to close two of its largest hotels in downtown San Francisco. He says the city’s streets are unsafe and expresses doubts about the area’s ability to recover.
Park Hotels & Resorts Inc. announced this week that it has suspended payments on a $725 million loan used to finance both its 1,921-room Hilton San Francisco Union Square properties and the Parc 55 San Francisco with 1,024 rooms and expects to remove these from its portfolio several “big challenges” in the California city.
A sign on the exterior of the Hilton San Francisco Union Square reads in front of the Parc 55 by Hilton hotel on June 6, 2023 in San Francisco, California. Park Hotels & Resorts Inc. has stopped paying its $725 million loan to secure the P… (Photo by Justin Sullivan/Getty Images / Getty Images)
| ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PC | PARK HOTELS & RESORTS INC. | 14.36 | +0.21 | +1.52% |
“Last week we made the very difficult but necessary decision to halt debt service payments on our CMBS loan in San Francisco,” Park Hotels CEO Thomas J. Baltimore Jr. said in a statement. “After much thought and deliberation, we believe it is in the best interests of Park shareholders to materially reduce our current exposure to the San Francisco market.”
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“More than ever, we believe San Francisco’s path to recovery will continue to be clouded and lengthened by major challenges – both old and new: record-breaking office vacancy rates, concerns about road conditions, lower returns to the office than comparable cities, and a weaker than expected City-wide development “We will be moving the convention calendar into 2027, which will negatively impact business and leisure demand and will likely significantly reduce compression in the city for the foreseeable future,” Baltimore said.
A view of the Parc 55 by Hilton Hotel on June 6, 2023 in San Francisco, California. Owner Park Hotels & Resorts Inc. has stopped paying its $725 million loan to secure the property and Hilton San Francisco Union Square, citing concerns about… (Photo by Justin Sullivan/Getty Images / Getty Images)
In its investor presentation in June, Park Hotels cited “ongoing safety concerns” as part of its rationale for giving up the two well-known San Francisco hotels and said the move would save $30 million a year in interest payments and some $200 million -Dollars in maintenance costs over the next five years.
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Overall, Park operates 46 hotels and resorts, mostly located in downtown and resort locations, including the New York Hilton Midtown, the Hyatt Regency in Boston, the Hilton Hawaiian Village Waikiki Beach Resort and the Orlando Waldorf Astoria.
Homeless people use illegal drugs at a camp along Willow St. in the Tenderloin neighborhood of downtown San Francisco on Thursday, February 24, 2022. (Gary Coronado/Los Angeles Times via Getty Images / Getty Images)
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Park’s departure comes amid a growing exodus of retailers fleeing downtown San Francisco for various reasons as the city continues to grapple with retail theft, homelessness and a raging drug crisis.