Due to failure to meet the 80% termination threshold for owner's cumulative priority returns to Service Properties Trust until August, the latter will transfer management of 98 of the 122 hotels to Sonesta. 24 hotels in this portfolio will also be sold for $ 153 million.
Service Properties Trust's agreements with Marriott International were originally scheduled to expire in 2035. They include the following hotels: 2 Marriott®, 2 Springhill Suites®, 12 TownePlace Suites®, 35 Residence Inns®, 71 Courtyards®. The minimum annual return required was $ 94.6 million.
Service Properties Trust has sent Marriott International, a letter exercising its right to terminate regarding the management agreements of 122 hotels with an effective date of January 31, 2021. The real estate investment trust is currently planning to transfer the branding and management of 98 of these hotels to Sonesta International Hotels Corporation. Marriott International was unable to settle the $ 11.0 million advance to cover the accumulated deficit for the 2020 balance, claimed by Service Properties Trust for October 5.
Service Properties Trust will ensure the sale of 24 of the 122 hotels in the portfolio: eight TownePlace Suites® hotels, or 834 rooms for a total sale price of $ 45.3 million as well as 13 Courtyard hotels totalling 1,813 rooms and three Residence Inn hotels with 342-room inns for an aggregate sales price price of $ 107.8 million. Transactions are expected to be completed by the end of 2020. The management of nine other hotels will be transferred to Sonesta on December 15, 2020. The balance of the portfolio, 89 hotels, will be transferred to Sonesta on January 31, 2021. The 98 unsold hotels will be operated under the Royal Sonesta, Sonesta, Sonesta Select and Sonesta ES Suites brands.
Service Properties Trust is a Newton, Massachusetts-based REIT that owns hotel, net lease service and necessity-based retail properties. It also owns around 34% of Sonesta.
Sonesta International Hotels Corporation is a hotel group also located in Newton with 80 branded hotels around the world.
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