Service Properties Trust details property deals with Q3 results

Service Properties Trust is selling 68 Sonesta International Hotels Corp.-branded hotels across 27 U.S. states with an aggregate net carrying value of $579.0 million as of Sept. 30 in transactions set to close by the end of the first quarter of 2022.

In reporting its latest results, the hotel real estate investment trust said the hotels include 46 extended stay hotels with 5,404 rooms, 19 select-service hotels with 2,461 rooms, and three full-service hotels with 895 rooms.

It also agreed to sell four net lease properties totaling 14,630 square feet across three states for $2.3 million, excluding closing costs. The sales are expected to be completed by the end of the fourth quarter.

During the quarter ended Sept. 30, the company sold two net lease properties totaling 6,639 rentable square feet for $700,000, excluding closing costs.

In October, it disposed of a net lease property with 7,070 of rentable square feet for $900,000, excluding closing costs.

On Nov. 1, Service Properties and Radisson Hospitality Inc. amended their management agreement in relation to nine hotels owned by the REIT, under which Radisson will retain management of eight hotels for a 10-year term effective Aug. 1.

The agreement now sets the annual minimum return due to the REIT at $10.2 million and Radisson has provided the REIT with a new $22.0 million limited guarantee for 75% of the aggregate annual minimum returns beginning in 2023.

Service Properties will finance about $12.0 million of renovations that are expected to be completed by the end of 2022.

The management and branding of the ninth hotel that was managed by Radisson was transitioned to Sonesta on Nov. 1.