Park Hotels & Resorts is selling its 25% stake in Hilton San Diego Bayfront, among the region’s largest hotels by room count, in a deal valued at more than $100 million.
The Tysons, Virginia-based real estate investment trust announced Wednesday that it entered into an agreement to sell its interest in the 1,190-room property, built in 2008 at 1 Park Blvd. in downtown San Diego, to the hotel's majority owner, Sunstone Hotel Investors of Irvine, California.
Park Hotels reported the price at $102 million, plus Park’s allocated share of reserves and working capital. That price represents a valuation of $628 million, or approximately $528,000 per room for the Hilton, the region’s third-largest hotel.
“While the Hilton Bayfront is a superb asset with a promising future, the right path for Park is to exit this minority interest at a fair price and redeploy capital toward other corporate uses,” Park Hotels CEO Thomas Baltimore Jr. said in a statement. Those other uses could include debt reduction, share repurchases and other investments within its portfolio, which currently includes 52 U.S. hotels and resorts with approximately 32,000 rooms.
After the sale of its interest in the San Diego property, located next door to the San Diego Convention Center, Park Hotels will have sold or disposed of 34 properties for more than $1.8 billion since its 2016 spinoff from Hilton Hotels, Baltimore said.
The partial-interest sale is among the largest hospitality property transactions by price in the San Diego region, which like other tourist regions has seen a significant rebound in hotel fundamentals during the past year as pandemic restrictions have loosened.
San Diego County saw more than $1.2 billion in hotel deals during 2021, up 290% from the prior year as the number of transactions more than doubled to 49, according to brokerage and research firm Atlas Hospitality Group. Deals involving the region’s largest hotels have historically been infrequent regardless of the state of the economy.
CoStar and public data show Sunstone acquired a 75% stake in the bayfront Hilton for $475 million from a joint venture that included Hilton Hotels in April 2011.