After Park Hotels & Resorts stopped paying the debt on two of the largest hotels in San Francisco, a receiver is set to take over the properties, aiming to sell them within a year.

The Tysons, Virginia-based hotel REIT said in a press release Thursday that the trustee of the $725M nonrecourse CMBS loan that is backed by the Hilton San Francisco Union Square and the Parc 55 San Francisco has filed a lawsuit asking a court to appoint a receiver to take control of the two hotels.

That receiver would have until Sept. 1, 2024, to market and sell the properties, according to documents filed with the Securities and Exchange Commission. If they aren't sold by that date — or 60 days afterward, if a contract is signed by the deadline — then the receiver would no longer have the authority to sell the hotels and the receivership would end with a nonjudicial foreclosure, per the SEC filing.

The trustee acting for the lenders, Wilmington Trust, had sued Park Hotels & Resorts earlier this week, the San Francisco Chronicle reported. The full loan for the properties is coming due next month.

Park Hotels & Resorts stopped making payments in June on the $725M CMBS loan tied to the two hotels. At the time, Park Chairman and CEO Thomas Baltimore said that San Francisco’s recovery from the pandemic “remains clouded and elongated by major challenges — both old and new.”

The loan was serviced by Wells Fargo, and the two hotels collectively hold nearly 3,000 rooms. They are the largest and third-largest hotels in the city and account for 9% of San Francisco’s hotel inventory, Bisnow previously reported.

Tourism has picked up across the world, as travelers have spent the last two summers making up for lost time as a result of the pandemic. San Francisco, however, has lagged in its recovery. A full recovery to 2019 tourism levels isn't expected for a few more years, according to the Chronicle.