San Francisco's Hotel Industry Faces Uncertain Future as Major Companies Write Off Properties.
Park Hotels & Resorts Inc. has stopped making payments towards a $725 million loan tied to the Hilton San Francisco Union Square and the Parc 55 San Francisco due to "major challenges" in the city. The decision to stop debt service payments was "very difficult, but necessary" and "in the best interest for Park's stockholders." The challenges San Francisco is facing include record high office vacancy, concerns over street conditions, and weaker than expected numbers of citywide convention events booked through 2027. San Francisco's commercial real estate troubles are representative of a bigger picture, with a $1.5 trillion wall of mortgage debt that comes due for repayment before the end of 2025, causing headaches for commercial real estate investors.