NEW YORK—Hospitality Investors Trust Inc. has refinanced two loans and, simultaneously, completed the acquisition of seven hotels pursuant to its previously announced purchase agreement with Summit Hotel Properties Inc.
The new loans, which total approximately $1.225 billion, each carry a two-year initial term with three one-year extension options subject to conditions, and consist of a mortgage loan and related mezzanine loans with an aggregate principal balance of $915 million, which are collateralized by 87 of Hospitality Investors Trust’s hotel properties; and a term loan with a principal balance of $310 million, which is collateralized by 28 of the the REIT’s hotel properties.
Citibank, N.A. acted as administrative agent and as collateral agent, and Citigroup and Deutsche Bank acted as joint lead arrangers for the the term loan. JPMorgan Chase Bank, National Association, was also an initial lender for the term loan.
The seven hotels in the Summit Portfolio consist of 651 keys and were acquired for an aggregate purchase price of $66.8 million. All the properties in the portfolio have long-term franchise agreements with one of the following brands: Marriott International (Courtyard, Residence Inn and Fairfield Inn), Hilton Hotels (Homewood Suites) or IHG (Staybridge Suites). The properties are located in Germantown, TN, and Ridgeland, MS. The transaction increases the Hospitality Investors Trust’s lodging portfolio to 148 hotels totaling 17,844 keys across 33 states.
Net proceeds (following the payment of fees and expenses) from the mortgage loan were used by Hospitality Investors Trust to refinance the EQTY 2014-INNS loan, which, as of March 31, had an aggregate principal balance of $895.4 million, was collateralized by 95 of the company’s hotel properties, and had a final maturity date of May 2019.
Net proceeds (following the payment of fees and expenses) from the term loan were used by the REIT for the following purposes: to refinance its previous term loan, which, as of March 31, had an outstanding principal balance of $235.5 million, was collateralized by 20 of the company’s hotel properties, and had a maturity date of August 2020; to finance a portion of the purchase price of the Summit Portfolio and; to fund reserves for contractual property improvement plans associated with certain hotels collateralized by the mortgage loan.