San Francisco continues to reel from skyrocketing rates of homeless and crime, causing many of the city’s namesake businesses to relocate and its once vibrant storefronts and business district to empty out.
As the city is already experiencing a significant economic downturn, its first and fourth largest hotels announced that they would be ceasing mortgage payments on their properties and letting the bank foreclose on them.
The CEO of Park Hotels and Resorts made the announcement on Friday, saying that it was in the best interests of stockholders to ‘materially reduce’ their investments in the San Francisco market.
The company said that it would be moving to more in-demand markets such as Hawaii.
In just a four-year span, the company’s two hotels lost nearly three-quarters of their annual revenue and the company’s shares plummeted by nearly 25 percent.
While some crime categories have decreased in San Francisco, robberies, which have been the primary source of the city’s crime-based and economic woes have continued to increase as they are already up 15 percent compared to last year.
Undoubtedly, many residents have come to perceive one of the company’s two hotels, Parc 55, as unsafe after it was the site of a shooting just a month ago.
The shooting occurred after a security guard chased a shoplifter out of a Walgreens, causing protests across the city near the hotel.
The Daily Mail Reports–
San Francisco’s tourism board launched a $6M ad campaign to overcome the city’s global reputation as a drug and crime-ridden hell hole. Six days later, the owner of two of the city’s biggest hotels announced it was abandoning them because it lost faith that the city can recover. pic.twitter.com/uaZRXWpD3R
— Michael Shellenberger (@shellenberger) June 6, 2023
The owner of two of San Francisco’s largest hotels has stopped making mortgage payments on the properties and will let them go into foreclosure as historic crime rates continue to deter tourists.
Park Hotels and Resorts announced on Monday that it stopped making payments on its $725 million loan due in November for the Hilton San Francisco Union Square and Parc 55 — the largest and fourth-largest hotels in the city, respectively.
‘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,’ CEO Thomas Baltimore Jr said in a statement.
‘Now, more than ever we believe San Francisco’s path to recovery remains clouded and elongated by major challenges’