Real estate investment trust Service Properties Trust (SVC) has agreed to amend existing hotel management agreements with hospitality firm Sonesta International Hotels.
The changes come as SVC expects to sell 68 of its 262 hotels managed by Sonesta.
Currently, SVC holds purchase and sale agreements or in the final stages of the buyer selection process for the 68 properties.
The hotels have a combined 8,760 keys and are valued at $579.0m.
The divesture is expected to complete in the first quarter of 2022.
SVC president and chief executive officer John Murray said: “Between our amended management agreements with Sonesta and the expected sale of 68 Sonesta hotels, we believe we are taking important steps to create a stronger hotel portfolio with improved coverage of our owner’s priority return.”
Under the terms of the amended agreements, Sonesta will continue to manage the remaining 194 hotels until 31 January 2037. It has two 15-year renewal options.
The companies also fixed owner’s priority return for the retained hotels at $325.2m annually.
In addition, SVC will renovate the retained hotels to meet brand standards.
Murray added: “The changes announced today to the Sonesta management agreements are substantially similar to the changes recently announced with the Hyatt and Radisson agreements and our 2019 Sonesta amendment.
“The Sonesta hotel sales process is going well, we have strong interest in these hotels from a deep pool of buyers and we believe that the proceeds will significantly enhance SVC’s liquidity position as it enters 2022.”