Service Properties Trust Sends Notice of Payment Shortfall to Marriott for Agreement Covering 122 Hotels

Nachrichtenquelle: Business Wire (engl.)
24.09.2020, 22:15  |  184   |   |   

Service Properties Trust (Nasdaq: SVC), or SVC, today sent a letter to Marriott International, Inc. (NYSE: MAR), or MAR, requesting MAR advance $11.0 million to cover the shortfall between the payments SVC has received to date from MAR and 80% of the priority returns due to SVC for the eight months ended August 2020. MAR has 10 days from receipt of the letter to make the payment, or SVC will have the right to terminate its agreement with MAR.

SVC’s agreement with MAR covering 122 hotels (2 Marriott, 2 Springhill Suites, 12 TownePlace Suites, 35 Residence Inns, 71 Courtyards) in 31 states currently requires annual minimum returns of $194.6 million and currently expires in 2035. Both the security deposit that SVC previously held to secure the minimum return payments under this agreement and the $30 million guarantee provided by MAR have been fully utilized.

If MAR does not make the requested payment and SVC terminates the agreement, SVC currently plans to transition management and branding of these 122 hotels from MAR to Sonesta International Hotels Corporation, or Sonesta. SVC owns approximately 34% of Sonesta and would share in the benefit of this new management agreement and in the hotels’ performance to the extent they ramp up in the post-pandemic recovery.

About Service Properties Trust

Service Properties Trust is a real estate investment trust which owns a diverse portfolio of hotels and net lease service and necessity-based retail properties across the United States and in Puerto Rico and Canada with 149 distinct brands across 23 industries. SVC’s properties are primarily operated under long-term management or lease agreements. SVC is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), or RMR Inc., an alternative asset management company that is headquartered in Newton, Massachusetts.

Warning Concerning Forward-Looking Statements

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever SVC uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, SVC is making forward-looking statements. These forward-looking statements are based upon SVC’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by SVC’s forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond SVC’s control. For example:

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