Park Hotels Lands $950M in Financing for Chesapeake Acquisition
- Sep 04, 2019
Park Hotels & Resorts Inc. announced it has secured a $950 million loan from Bank of America to finance its previously announced acquisition of Chesapeake Lodging Trust. The loan terms consist of a $100 million two-year tranche and an $850 million five-year tranche.
Back in May, the two hospitality REITs announced they agreed to merge in a cash and stock deal valued at approximately $2.7 billion. Once the two companies officially merge, which Park is expecting by the end of the month, the new combined firm will have an estimated value of $12 billion and will be the second-largest hospitality REIT.
The merger will initially combine Park’s 51-property portfolio with Chesapeake’s 20-asset portfolio. Also spelled out in the agreement is the pre-closing disposition of non-core assets, including three Park properties currently under contract and Chesapeake’s New York holdings, which consist of the 122-key Hyatt Herald Square New York and the 185-key Hyatt Place New York Midtown South.
Once the merger closes, the new company will own a 35,383-key portfolio of 66 assets across 17 states and the District of Columbia. Notable assets in the portfolio include the Hyatt Regency Mission Bay Spa and Marian, a 438-key hotel in San Diego, the 403-key W Chicago City Center and the 292-key Royal Palm South Beach Miami, a Tribute Portfolio Resort.