American Realty Capital Hospitality Trust Inc. changed its name to Hospitality Investors Trust Inc., completed its transition to self-management and closed an initial investment of $135 million from an affiliate of Brookfield Strategic Real Estate Partners II.
Brookfield has committed to a total investment of $400 million in the form of convertible preferred limited partnership units of the company's operating partnership, now known as Hospitality Investors Trust Operating Partnership LP. The balance of the units will be issued on a delayed-draw basis through February 2019. Brookfield Strategic Real Estate Partners II is a real estate private equity fund managed by affiliates of Brookfield Asset Management Inc.
"We expect Brookfield’s investment commitment to ensure our ability to complete our property renovations on a timely basis and to close the Summit acquisition, which we believe will enhance our portfolio value," CFO Edward Hoganson said in a release. "In addition, by addressing our near-term financing needs, we believe the investment should provide the Company with a more sustainable capital structure and an improved debt maturity profile."
Hospitality Investors has agreed to acquire seven hotels from Summit Hotel Properties Inc. for $66.8 million. The closing of that deal has been pushed to April 27.
The company will also use proceeds to redeem preferred equity interests held by Whitehall affiliates that mature in 2018 and 2019, and to settle company debt to Summit affiliates, among other things.
Jefferies LLC and Proskauer Rose LLP acted as financial and legal adviser to the company, respectively. Hentschel & Co. and Morrison & Foerster LLP served as financial and legal adviser to the independent directors of the company's board. Cleary Gottlieb Steen & Hamilton LLP served as legal adviser to Brookfield.