The owner of two major hotels is bailing on the city of San Francisco, citing the ongoing crime problem. This is more evidence of the ‘doom loop’ critics of the city have talked about in recent months.
San Francisco used to be seen as a popular city for business conventions, and of course the city’s hotels have been a major factor in that aspect of the city’s economy.
The FOX Business Network reports:
Major hotelier abandoning San Francisco properties, says city’s ‘path to recovery remains clouded’One of the largest publicly traded real estate investment trusts in the U.S. plans to close two of San Francisco’s major downtown hotels, saying the city’s streets are unsafe and expressing doubts about the area’s ability to recover.Park Hotels & Resorts Inc. announced this week that it stopped making payments on a $725 million loan that secured both its 1,921-room Hilton San Francisco Union Square and 1,024-room Parc 55 San Francisco properties and expects to remove them from its portfolio, citing several “major challenges” in the California city.”This past week we made the very difficult, but necessary decision to stop debt service payments on our San Francisco CMBS loan,” Park Hotels CEO Thomas J. Baltimore Jr. said in a statement. “After much thought and consideration, we believe it is in the best interest for Park’s stockholders to materially reduce our current exposure to the San Francisco market.””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 and will likely significantly reduce compression in the city for the foreseeable future,” Baltimore said.
Here’s a local video report:
Michael Shellenberger, who wrote the book ‘San Fransicko,’ notes that this news comes just after the city spent millions on an ad campaign aimed at saving tourism:
When will the people of San Francisco decide that they have had enough?
Featured image via YouTube.
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