BUSINESS

Hilton SF Union Square, Parc 55 owner stopping payments on loan, firm announces

The SF Hotel Council said the hotels will stay open for business.

Monday, June 5, 2023 8:22PM

SAN FRANCISCO (KGO) -- Another blow is being dealt to downtown San Francisco. The investment firm that owns Hilton San Francisco Union Square and Parc 55 hotels is walking away from its debt and surrendering them to its lender.

Park Hotels & Resorts has opted to cease payments on a $725 million loan, according to a press release. ... "The Company intends to work in good faith with the loan's servicers to determine the most effective path forward, which is expected to result in ultimate removal of these hotels from its portfolio."

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The 1,921-room Hilton San Francisco Union Square is the city's largest hotel, occupying an entire city block. Parc 55 has 1,024 rooms. {snip} The firm cited the continued debt burden of the two hotels on its portfolio and multiple factors that have made the San Francisco market less desirable for their business.

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Their key concerns are record levels of office vacancy (which are at 30 percent right now), fewer employees returning to offices, a "weaker than expected" convention calendar through 2027 and on-going concerns over safety and security.

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