Hospitality Properties Trust (HPT) said Thursday that it has entered into deals with Marriott International, Inc. (MAR) to retain and renovate certain Marriott branded hotels previously offered for sale and to extend the term of MAR's limited guarantee of the payments due to HPT with regard to the hotels.
In June 2011, HPT announced that it had entered agreements with MAR to re-align certain contracts affecting 71 Marriott branded hotels. Since the agreement in June, HPT has agreed to sell one hotel for net proceeds of about $29 million.
Hospitality Properties has concluded that the financial prospects for the remaining 20 hotels are such that greater long term value may be achieved by retaining those hotels under HPT ownership and MAR management than by selling the hotels.
Accordingly, HPT has agreed to retain ownership of and renovate at least 18 of the remaining 20 hotels previously offered for sale, and MAR has agreed to extend its limited guarantee of owner's priority amounts due to HPT through 2019.
HPT's aggregate owner's priority amount for the 18 hotels that HPT has decided to retain ownership of under MAR management is approximately $18 million per year. HPT currently expects to provide about $43 million to renovate these 18 hotels to current "Marriott" brand standards.
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