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Service Properties Trust (NASDAQ:SVC) has completed the sale of three hotels totaling 390 rooms in two states for a combined price of $29 million, excluding closing costs. The transaction was finalized on Wednesday as part of a previously announced agreement to sell a portfolio of 113 hotels comprising 14,803 rooms for a total of $913.3 million. According to InvestingPro data, this move comes as SVC carries a substantial debt load of $5.7 billion with a debt-to-equity ratio of 8.22.
According to a statement in a press release and filed with the Securities and Exchange Commission, the company has now sold 44 hotels from the portfolio, representing 6,108 rooms, for a combined sales price of $345.8 million. Service Properties Trust remains under agreement to sell the remaining 69 hotels, which have a total of 8,695 rooms, for $567.5 million. These remaining sales are expected to be completed in phases by the end of 2025.
The company stated that proceeds from these transactions are expected to be used to repay debt. The report also notes that 18 hotel sales completed through Wednesday, as part of the 45 Hotel Sale Portfolio, constitute significant dispositions under SEC regulations. Pro forma financial information related to these sales has been included as an exhibit to the filing. The debt reduction strategy is crucial as SVC reported a negative $1.68 diluted EPS for the last twelve months.
Service Properties Trust is a real estate investment trust based in Maryland, with its common shares traded on the Nasdaq Stock Market under the ticker SVC.
This article is based on a statement from a press release and an SEC filing.
In other recent news, Service Properties Trust has been actively involved in a series of hotel sales as part of a larger asset disposition strategy. The company reported the sale of five hotels, totaling 640 rooms, for $50 million, excluding closing costs. This transaction is part of a broader agreement to divest 113 hotels for an aggregate sales price of $913.3 million. Additionally, Service Properties Trust completed the sale of three hotels, comprising 399 rooms, for $22.5 million. The company remains under contract to sell 75 more hotels, with completion expected by the end of 2025.
Furthermore, Service Properties Trust sold two hotels, totaling 318 keys, for $25 million. Wells Fargo has downgraded Service Properties Trust’s stock from Overweight to Equal Weight, citing concerns about the balance sheet and noting that the planned hotel dispositions are already reflected in the stock price. In another development, Service Properties Trust has entered into new management agreements with Sonesta International Hotels Corporation for 59 hotels it plans to retain. These agreements, effective from August 2025, include various management fees based on hotel type and services provided.
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