When hotel real estate investment trust Park Hotels & Resorts announced it was handing back the keys to the Parc 55 and Hilton Union Square hotels in San Francisco, that began the most watched hotel receivership saga in recent memory.
So it was no surprise when the sale of those hotels to New York-based investment groups Newbond and Conversant was named the transaction of the year at the recent Americas Lodging Investment Summit.
During the most recent episode of the CoStar News Hotels podcast, HotelAVE Founder and CEO Michelle Russo discussed what it was like leading those large and complicated hotels through a highly publicized receivership.
"They were beasts of assets," she said. "Two, thousand-plus-room properties with lots of moving parts. I have to say Park was really cooperative in assisting us in the transition."
Park Hotels & Resorts walked away from the properties because it no longer made sense to keep paying the $725 million in debt on them given the weakening dynamics in San Francisco as a market. With the new owners picking up the debt at a reduced cost, Russo said market dynamics played into how buyers looked at valuation.
"It's definitely how the market affected top-line revenue, which then translates into" earnings she said. "Then also the market impact on cap rates. So if you think back to 2015 [when the initial debt was placed on the hotels], San Francisco was perceived as one of the top institutional hotel investor markets in the country."
While still not as strong as it was a decade ago, investor sentiment is looking more positive for San Francisco than it has since the pandemic-era crash, Russo said. Part of that is more political will in the city to make it business-friendly and improve outside perception.
"The mayor is super focused on addressing homelessness and other considerations that were negatively affecting perceptions of tourism," she said. "All those things started to create momentum where you started to see in 2025 in particular a lot of growth in citywide group" business.
She noted that trend was only accelerated by hosting the Super Bowl to start this year.
For more from HotelAVE's Michelle Russo, listen to the podcast embedded above.