October 8, 2020
Newton MASS.-based real estate investment trust Service Properties Trust (SVC) has announced the termination of the management agreements for 122 hotels with Marriott International. SVC plans to transfer the branding and management of 98 of the hotels to Sonesta. Additionally, SVC plans to sell 24 of the 122 hotels for a total of $153 million.
SVC’s agreements with Marriott International cover 122 hotels (2 Marriott, 2 Springhill Suites, 12 TownePlace Suites, 35 Residence Inns, 71 Courtyards) in 31 states. Lodging companies have been slashing expenses as the industry deals with the ongoing COVID-19 pandemic. Service Properties owns a 34% stake in Sonesta and took the opportunity to nix the agreements with Marriot, which allows it to expand the lodging brand while cutting costs and giving it flexibility to sell more assets or convert hotels into apartments.
SVC had previously entered into agreements to sell a portfolio of eight TownePlace Suites hotels with 834 rooms in four states for $45.3 million as well as a portfolio of 16 hotels with 2,155 rooms in nine states (13 Courtyard hotels with 1,813 rooms and three Residence Inn hotels with 342 rooms) for $107.8 million.
Upon transfer to Sonesta, the 98 Marriott-branded hotels not being sold will be operated under the Royal Sonesta, Sonesta, Sonesta Select and Sonesta ES Suites brands. There are currently 80 Sonesta-branded hotels worldwide.
For comments, questions or concerns, please contact David Cohen