ARA H-Trust To Divest 4 Hyatt Place Hotels for US$32.5m
Main Photo: The Hyatt Place Pittsburgh Cranberry, Pennsylvania, one of the four hotels to be sold in the deal
Date: July 2022
Names: Hyatt Place Pittsburgh Cranberry, Hyatt Place Birmingham Inverness, Hyatt Place Cincinnati Northeast and Hyatt Place Cleveland Independence
Locations: Pennsylvania, Alabama and two in Ohio
Number of Keys: TBA
Seller: Singapore listed ARA US Hospitality Trust
Buyer: New York based Three Wall Capital, headed up by Alan Kanders, who founded the company in 2008
ARA US Hospitality Trust has agreed to sell a 4-property portfolio of Hyatt Place hotels for US$32.5 million to US-based real estate investment firm Three Wall Capital.
The consideration represents a 3.2 per cent premium above the portfolio’s independent market valuation of US$31.5 million as at end-2021, said the stapled group’s managers in a bourse filing on Thursday (Jun 30).
Completion of the sale is expected to take place in Q3 of 2022. Aside from general working capital requirements, the estimated US$31.4 million of resultant net proceeds will be used to reduce existing bank borrowings to improve ARA H-Trust’s aggregate leverage.
The portfolio comprises Hyatt Place Pittsburgh Cranberry in Pennsylvania; Hyatt Place Birmingham Inverness in Alabama; as well as Hyatt Place Cincinnati Northeast and Hyatt Place Cleveland Independence, which are both located in Ohio.
According to the stapled group’s managers, the 4 properties are non-core assets with declining historical performance and located in sub-markets with declining demand, where asset enhancement is not expected to boost cashflow yield in the future year.
Divesting these properties will allow ARA H-Trust to free up capital in the process of optimising and rebalancing its portfolio while strengthening the stapled group’s balance sheet for long-term growth, said the managers.
Following their last completion in January 2020, ARA US Hospitality’s portfolio consists of 41 upscale select-service hotels with 5,340 guest rooms located throughout 22 states. The 41 hotels include 38 Hyatt®-branded hotels and 3 Marriott®-branded hotels.
Three Wall Capital is a hospitality equity and debt investment group, founded in 2008 by Alan Kanders, and they have completed over $1.5 billion in transactions in a principal investor capacity since inception. TWC invests with the philosophy that hotel real estate is subject to both short and long term cycles, and therefore, TWC’s current focus is developing focused service and lifestyle hotels. TWC’s investment strategy is to acquire and develop hotels in markets with strong growth outlooks in terms of population, disposable income, jobs, diversity of high-quality food and beverage experiences, retail offerings, and office space. The current hotel portfolio consists of 65 hotels located throughout the United States and Bermuda. They represent luxury full-service hotels, independent hotels, a private beach club, branded limited-service hotels, and 58 extended-stay hotels.
Price: US32.5m
Price per Key: TBA
THPT Comment: Both parties know their onions when it come to this limitd service type of hotel….makes sense!
First Seen: Business Times of Singapore
The Hotel Property Team (THPT) is a small group of highly experienced business professionals. Between us, we provide a range of skills and experience which is directly relevant to those involved in the hotel property market. For more information – Visit www.thpt.co.uk or email info@thpt.co.uk
