The locally headquartered Hospitality Properties Trust, a real estate investment trust, simultaneously entered a long term management agreement for InterContinental Hotels Group to operate these hotels in return for an owner's priority return to Hospitality Properties Trust of $16.9 million per year, plus percentage participations in operating revenues in excess of negotiated amounts. InterContinental Hotels Group's management contract for these hotels has an initial term expiring in 2023 and InterContinental Hotels Group has two all or none renewal options for 12.5 years each thereafter.
John G. Murray, president of HPT, notes that these hotels are "upscale extended stay hotels which are target marketed to business travelers required to be in one location for extended periods and to families traveling together. Most of the accommodations in these hotels are one- and two-bedroom suites with full kitchens and separate living rooms." Hospitality Properties Trust funded this acquisition by using cash on hand and borrowings under its unsecured, revolving bank credit facility.
The hotels are located in California, Colorado, Florida, Georgia, Maryland, Massachusetts, Michigan, North Carolina, South Carolina, Texas and Washington State. The average age of these hotels is about three years.
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