NEWTON, Mass.--(BUSINESS WIRE)--Service Properties Trust (Nasdaq: SVC) today announced it has completed the sale of 123 net lease properties with approximately 2.4 million square feet in 26 states with leases requiring an aggregate of $34.1 million of annual minimum rents for $435 million, excluding closing costs. The sale is part of SVC’s previously announced disposition plan to sell up to $500 million of net lease assets in connection with its acquisition of a net lease portfolio of service-oriented retail properties from Spirit MTA REIT (NYSE: SMTA).
“The disposition of this net lease portfolio represents a pivotal step in executing on the company’s strategy to sell certain non-core assets acquired as part of the SMTA transaction,” said John Murray, Service Properties Trust’s President and Chief Executive Officer. “Coupled with our other recent net lease sales and agreements to sell totaling $66 million, we have reached our target of $500 million in net lease asset sales, the proceeds of which will be used to reduce the company’s leverage.”
Three additional net lease properties that SVC has agreed to sell are subject to rights of first refusal to purchase those properties. SVC expects those rights of first refusal will be exercised. These sales are expected to close by the end of 2019 for an aggregate of approximately $3 million.
Service Properties Trust is a real estate investment trust, or REIT, which owns a diverse portfolio of hotels and net lease service and necessity-based retail properties located in 48 states, Washington, DC, Puerto Rico and Canada. SVC's properties are operated under long term management or lease agreements. SVC is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management company that is headquartered in Newton, Massachusetts.
WARNING REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based upon SVC’s present beliefs and expectations, but these statements and the implications of these statements are not guaranteed to occur and may not occur for various reasons, some of which are beyond SVC’s control. For example:
- This press release states that the disposition of the net lease portfolio announced today represents a pivotal step in executing on SVC’s strategy to sell certain non-core assets acquired as part of the SMTA transaction, which may imply that SVC will benefit from having executed this strategy and that its operating results and business prospects will improve as a result. However, SVC’s business is subject to risks, including risks outside SVC’s control. As a result, SVC may not benefit as a result of executing this strategy and its operating results and business prospects may not improve.
- This press release states that SVC will use the net proceeds from the sale of assets announced today to reduce leverage. However, SVC may elect to use these proceeds for other business purposes. Further, any reduction in SVC’s leverage that may result from any repayment of its debt with these proceeds may be offset by future borrowings that SVC may incur.
- This press release states that SVC expects rights of first refusal options to be exercised to purchase three net lease properties that SVC has agreed to sell for an aggregate of approximately $3 million and that these sales are expected to close by the end of 2019. There can be no assurance SVC will complete the sales of these properties and these sales may be not occur, they may be delayed or their terms may change.
For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Except as required by law, SVC does not intend to update or change any forward-looking statements as a result of new information, future events, or otherwise.
A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq.
No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.