Park Hotels & Resorts has sold two of its San Francisco hotel properties in two separate transactions. The company sold Le Meridien San Francisco and Hotel Adagio for a total of $303.5 million, representing a 6.1% cap rate on 2019 net operating income, including capital expenditures. The sales price equates to $572,000 per key for the 531-room portfolio.

As a result of these sales, Park Hotels & Resorts San Francisco exposure will shrink by 210 basis points to 14.6%. The 360-room Le Meridien San Francisco sold for $221.5 million, representing a 5.9% cap rate on 2019 net operating income, including capital expenditures. The 171-room Hotel Adagio, Autograph Collection sold for $82 million, representing a 6.6% cap rate on 2019 operating income when adjusted for capital expenditures.

Park Hotels will use the proceeds from the sales to repay debt on its remaining bank term loan. Following the repayment, the company should have $80 million in outstanding debt. Since spinning off from Hilton in 2017, the company has sold a total of 29 properties, including these two most recent transactions, for a total value of $1.7 billion.