Hospitality Properties Trust finalized its $2.4 billion cash purchase of a net-lease service retail portfolio from Spirit MTA REIT.
As prepayment penalties tied to extinguishing the existing mortgage debt on its portfolio, single-tenant net-lease real estate investment trust Spirit MTA also received $82.1 million from Hospitality Properties Trust.
Hospitality Properties Trust used net proceeds from its recently concluded $1.7 billion unsecured senior notes offering and a draw on its revolving credit facility to fund the acquisition. Hospitality Properties Trust terminated a $2.0 billion unsecured term loan facility commitment upon closing the aforementioned unsecured debt offering.
Hospitality Properties Trust, which owns a diverse portfolio of hotels and net-lease service and necessity-based retail properties across the U.S., Canada and Puerto Rico, will rebrand as Service Properties Trust. It will continue to trade its common shares on the Nasdaq, but under the new SVC ticker as of market open on Sept. 25.
Spirit MTA REIT received net proceeds of approximately $241 million from the transaction, while its external manager Spirit Realty Capital Inc. received about $265 million in aggregate proceeds.
Spirit MTA REIT said it successfully recovered all amounts owed under the Shopko B-1 term loan and closed on the sale of its PwC property on Sept. 12 for $1.9 million in net proceeds.
Going forward, Spirit MTA REIT, or the liquidating trust expected to be created, will receive management services in connection with its wind down from a unit of Spirit Realty under an interim asset management agreement. Spirit MTA REIT will pay a substantially reduced annual fee of $1 million during an initial one-year term, plus certain cost reimbursements under that agreement, which will be terminable without fees by Spirit MTA REIT at any time and by Spirit Realty after the initial one year.
BofA Merrill Lynch was the exclusive financial adviser to Hospitality Properties Trust on the deal, with Hunton Andrews Kurth LLP serving as its legal adviser.
