Hospitality Properties Trust agreed to sell 20 travel centers in 15 states to tenant TravelCenters of America LLC for $308.2 million, with the parties also agreeing to amend the existing leases.
The hotel real estate investment trust expects to realize a $160.0 million gain from the sales, with proceeds earmarked to repay borrowings under its revolving credit facility and for general business purposes.
TravelCenters expects to acquire nine of the travel centers for $140.5 million on Jan. 17, with the remaining purchases set to close in two phases by the end of the month.
The total annual minimum rents due for the remaining 179 travel centers that the REIT leases to TravelCenters will be $243.9 million.
Hospitality Properties will receive $70.5 million of previously deferred rents in 16 equal quarterly installments, starting April 1, with timing of the repayment accelerated from the previous staggered due dates between June 2024 and December 2030 in exchange for the deferred rent amounts being discounted.
The REIT noted that it will receive additional potential percentage rent beginning in 2020 equal to 0.5% of the excess of nonfuel revenues over nonfuel revenues in 2019, adding that the percentage rent is in addition to any percentage rent amounts it is already receiving from the tenant.
The parties also agreed to extend the term under each of the five TravelCenters leases by three years.