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Service Properties Trust (NASDAQ:SVC), a hospitality REIT with a market capitalization of $450 million and annual revenue of $1.9 billion, announced Tuesday that it has entered into new management agreements with Sonesta International Hotels Corporation and certain subsidiaries for 59 hotels it plans to retain. According to InvestingPro analysis, the company is currently trading below its Fair Value, suggesting potential upside opportunity. The agreements became effective August 1, 2025, and each has an initial 15-year term, expiring on July 31, 2040. Sonesta has two options to renew each agreement for an additional 10 years.
Under the terms of the new agreements, Sonesta will receive a base management fee calculated as 3.0% of gross revenues for full service hotels and 5.0% for extended stay and select service hotels. With last twelve months EBITDA of $542 million and a healthy current ratio of 2.42, Service Properties Trust maintains strong operational flexibility. InvestingPro data reveals the company has maintained dividend payments for 31 consecutive years, demonstrating long-term financial stability. Additional fees include an incentive fee starting in 2026, a brand promotion fee of 3.5% of gross room revenues, a loyalty fee that varies by hotel type, a centralized service fee adjusted annually for inflation, and a construction management fee of 3% on capital expenditures managed by Sonesta.
Service Properties Trust is required to fund capital expenditures at the hotels and maintain minimum working capital based on the number of rooms to support operations. The agreements allow for termination by Service Properties Trust in certain circumstances, including specified events of default or if minimum performance thresholds are not met for two consecutive years, beginning with the measurement period starting in 2028.
The company also reported that it previously identified 122 other hotels managed by Sonesta for sale in 2025. As of August 29, 2025, 10 of these hotels have been sold, agreements are in place to sell 111 more, and one hotel is being marketed. Sonesta has agreed to waive any termination fees for these sale hotels.
This information is based on a statement from a recent SEC filing. For comprehensive analysis of Service Properties Trust’s financial health, valuation metrics, and growth potential, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert insights and actionable intelligence.
In other recent news, Service Properties Trust reported its second-quarter 2025 earnings, which showed a larger-than-expected loss per share. The company posted an actual EPS of -$0.23, falling short of the forecasted -$0.20. However, revenue slightly exceeded expectations, coming in at $503.44 million compared to the anticipated $497.76 million. Despite the revenue beat, the earnings miss was a significant point of focus for investors. These recent developments have caught the attention of analysts and investors alike. The company’s financial performance in this quarter has been a topic of interest, especially given the mixed results. Service Properties Trust’s earnings and revenue figures are crucial indicators for stakeholders assessing the company’s current financial health. The announcement has led to discussions among analysts, although no specific upgrades or downgrades from firms were noted in the recent news.
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