HPT Picks Up 4 Marriotts After RMA Opens Gates

NEWTON, MA— With change comes opportunity, and for Hospitality Properties Trust (a REIT), the Reit Modernization Act (RMA) brought about the opportunity to grow its portfolio. The company just picked up four Marriott hotels from Marriott International for $102 million. The properties, together with 31 hotels currently owned by HPT and previously leased to Marriott, will be leased to a new taxable subsidiary of HPT, and will continue to be managed by Marriott through 2019. According to Marriott executives, the deal was a “no brainer”— it keeps in line with the company’s strategy to sell company-developed hotels while retaining long-term management agreements. “And we have a long-standing relationship with HPT,” said Mike Dearing, svp/project finance for Marriott International. “They are positive about Marriott brands, and with the change in tax laws (RMA), this gave us a good opportunity to sell them some hotels.” The deal gives HPT an additional 900 guestrooms at the following four hotels: a 356-room Marriott resort in Kauai, Hawaii; a newly developed Courtyard by Marriott with 295 guestrooms in California; and a 114-room SpringHill Suites and a 135-room TownePlace Suites in Washington state. Dearing said that Marriott International will continue to look for opportunities to sell company-developed hotels and does not see the current industry climate as a hindrance. “Investors are attracted to a strong brand, like Marriott, particularly in soft times,” he said. “This is a routine chapter in a continuing program to sell the company’s assets. You will see more of this,” he said. Meanwhile, HPT’s hotels will be leased to a new HPT taxable REIT subsidiary. The company owns, in all, 228 hotels in 37 states. —Shannon McMullen