The acquisitions are subject to completion of satisfactory due diligence and financing. The transactions are expected to close in 2015 during the third quarter and are projected to be accretive to 2015 fourth quarter results.
Changes Name to Condor Hospitality
The company has changed its name from Supertel Hospitality to Condor Hospitality Trust. Upon the completion of Nasdaq procedures, the company's common stock trading symbol will change from SPPR to CDOR. The trading symbol for the company's Series A preferred stock will change from SPPRP to CDORP and the trading symbol for the company's Series B preferred stock will change from SPPRO to CDORO.
"The acquisition of these three hotels aligns perfectly with the new strategy underway at the company and creates a great opportunity for us to announce the renaming of the company to Condor Hospitality," said Bill Blackham, Condor Hospitality's CEO. "The name Supertel connotes economy and midscale hotels, segments that are no longer part of our future plans, which was an important part of the consideration behind renaming the company. The recently announced prospective acquisitions and the new name are consistent with the dynamic new direction for the company.
"The Condor is a highly respected bird known for its considerable strength, tenacity and long life, traits that exemplify what we strive to be as a company -- a respected industry leader in the premium, select-service, extended-stay and limited service hotel segments operated under high quality, contemporary brands."
"As previously announced, we have accelerated capital recycling through disposition of much of our economy and economy extended-stay hotel portfolio which has an average age of 30 years and in many cases is located in tertiary markets," he noted. "We intend to reinvest the capital from those dispositions into a higher quality, significantly newer, upscale portfolio of hotels in order to drive increased shareholder value."
Blackham said that the hotels under contract are a window into the company's portfolio of the future. Condor's acquisition profile will be hotels located primarily in the 20th through 50th MSAs. The hotels under contract are located in Atlanta, the country's 8th largest MSA; San Antonio, the 25th; and Jacksonville, the 40th. Targeted hotels are expected to have an average investment in the $15 to $20 million range with an average age of 10 years or less. He also pointed out that this off market acquisition is the result of one of several evolving strategic alliances with highly competent management companies, in this case Peachtree Hotel Group and its affiliate Peachtree Hospitality Management ("PHM"). PHM is a Georgia based hotel property management company currently operating 27 hotel properties with more than 3,000 hotel rooms. It is an approved operator of the major, premium hotel brands including Marriott, Starwood, InterContinental, Hilton, Hyatt, Choice and Wyndham.
"Condor is in a state of transition, divesting older properties in the economy segment and investing in newer, contemporary hotels to create a significantly larger hospitality REIT comprised of a higher quality portfolio with greater margins and located in markets with better fundamentals," he said. "We will remain highly disciplined in our acquisition investment strategy, continuously review our portfolio and, when appropriate, upgrade into properties that we believe will generate more attractive returns. Brand considerations will be important in our portfolio because brand relevancy is critical to meeting evolving guest preferences, particularly the increasingly important Millennial generation.
About the Hotels
The Hotel Indigo Hartsfield Atlanta International Airport was built in 2012 on a 1.76 acre parcel near the world's busiest airport and is located at 1776 Harvard Ave., in College Park, Ga. The 142-key boutique hotel offers 2,100 square feet of meeting space, a high energy entrance and lobby area, the Harvard & Main Restaurant and bar, fitness room, business center and 93 parking spaces.
The SpringHill Suites Downtown/Riverwalk, San Antonio, Texas, is located on 1.1 acres at 524 S. St. Mary's Street in the heart of the popular Riverwalk tourist/business district in San Antonio. The property opened in December 2014 following extensive renovations during an upbranding conversion. The city's convention center, only two blocks away, is expanding to 1.65 million square feet, which will make it the ninth largest in the country. No property improvement plan is anticipated due to the recent conversion. The 116-key, all-suite, four-story hotel features 2,100 square feet of meeting space, lobby and breakfast area, business center, swimming pool, fitness center and 34 parking spaces.
The Courtyard by Marriott Jacksonville, Flagler Center is located adjacent to the 1.4 million square foot Flagler Center business park, the Baptist Medical Center South and the Citi Card credit card processing center. Situated on 3.0 acres at 14402 Old St. Augustine Road, the 120-room hotel features 565 square feet of meeting space, lobby and cafe restaurant/lounge, business center, fitness center, swimming pool and 139 parking spaces. Opened in 2007, the property was significantly updated and renovated in 2014, including upgrading to Courtyard's new Bistro concept. No PIP requirement is anticipated.
"These hotels are in 'like-new' condition in very attractive markets and have brand affiliation conducive to future RevPAR expansion, particularly given the recent completion of extensive renovations," Blackham said.
"Upon completion of the acquisitions, Condor will additionally own premium-branded properties in the Marriott and InterContinental brand families. We have an active pipeline within these brands, as well as with other premium-branded hotel companies such as Hilton and Hyatt."