Owner of SF's Largest Hotel, the Hilton Union Square, Is Walking Away, Surrendering It to Lender

[mountaineer]

Owner of SF's Largest Hotel, the Hilton Union Square, Is Walking Away, Surrendering It to Lender
June 5, 2023
Jay Barmann
SFist

Another bit of bad news for downtown San Francisco arrived Monday morning with the revelation that the investment firm that owns the Hilton San Francisco Union Square and Parc 55 hotels is walking away from its debts and giving up hope on a return of SF's convention market.

Virginia-based REIT Park Hotels & Resorts has opted to cease payments on a $725 million loan, as the SF Business Times reports today, essentially surrendering over 2,900 hotel rooms and hospitality facilities to its lender.

This includes the 1,921-room Hilton San Francisco Union Square, which is San Francisco's largest hotel, occupying an entire city block, and one of the country's largest hotels outside of Las Vegas.

Park Hotels & Resorts is also giving up on the 1,024-room Parc 55, citing the continued debt burden of the two hotels on its portfolio, and multiple factors that have made the SF market less desirable for their business. ...

"Now more than ever, we believe San Francisco’s path to recovery remains clouded and elongated by major challenges, both old and new: record high office vacancy; concerns over street conditions; lower return to office than peer cities; and a weaker than expected citywide convention calendar through 2027 that will negatively impact business and leisure demand."...

The city's response to the decline in corporate and leisure visitors? SF Tourism Board Launches New Ad Campaign to Sell City as Still Quirky and Fun. They're trying to blame it on Covid.

[PeteS in CA]

The hotel's move-out is/will be part of the larger spiral. Tourists, shoppers and conventions are staying away, due to obvious reasons, and with this reduction of high-end hotel space, even more tourists and conventions will stay away. Consequently, SF's sales tax revenue is declining and will do so even more, as is and will its revenue from the Moscone Convention Center.

The biggest obstacles to SF stopping their downward spiral are the ideology and pride of its Board of Stuporvisors and failure to muzzle the city's activists.

Speaking personally, I haven't done a running event in SF since April 2013, and probably have not been to SF since May 2014. I avoid the place (and not just due to it politics and bumfestation).

[mountaineer]

Indeed, Pete. Can't imagine a visit in the city's current condition.

[DefiantMassRINO]

If SF downtown real estate collapses, that will cause issues with property tax revenue and lender solvency if any particular lender has concentrated risk.

[Smokin Joe]

Indeed, Pete. Can't imagine a visit in the city's current condition.

Oh, I don't know. An (armored) bus tour might appeal to someone...

[Fishrrman]

"the 1,921-room Hilton San Francisco Union Square, which is San Francisco's largest hotel, occupying an entire city block"

1,921 rooms?
Could cram a lotta illegal border jumpers in there!
(hint... hint...)

I imagine that someday, after even Apple has packed it in and moved out of California, that Steve Jobs' "space ship" will be full of illegals and homeless, as well...

[sneakypete]

If SF downtown real estate collapses, that will cause issues with property tax revenue and lender solvency if any particular lender has concentrated risk.

@DefiantMassRINO

It WILL leak past SF and cause financial problems all over the country. LOTS of cities both big and small depend on tourist dollars to keep the city afloat financially,and when that money stops coming in,infrastructure starts collapsing,and nobody can afford to keep paying the high taxes.

The result is many  cities will fail without gooberment bail-out money saving them,and how long will it take before it will take a wheelbarrow full of money to buy groceries for a week for the typical family?

We all know what will happen next.

Anarchy  in the streets,and the creation of a police state.