American Realty Capital Hospitality Trust has entered into an agreement to acquire a portfolio of five hotels totaling 565 rooms for a purchase price of $92.5 million from affiliates of Wheelock Real Estate Fund, sponsored by private equity firm Wheelock Street Capital. The hotels are in the midscale segment.
They are: the Courtyard Austin Round Rock in Austin, Texas; the Courtyard College Station in College Station, Texas; the Courtyard Nashville at Opryland in Nashville, Tenn.; the Fairfield Inn & Suites Nashville at Opryland in Nashville, Tenn.; and the SpringHill Suites Cincinnati North/Forest Park in Cincinnati, Ohio.
The acquisition of the Wheelock Portfolio, when completed, will increase ARC Hospitality's lodging portfolio to 127 hotels totaling 15,487 rooms across 32 states.
"We are delighted to acquire this outstanding portfolio of premium Marriott-branded hotels, which we believe are located in some of the nation's top-performing lodging markets and are proximate to a diverse base of powerful demand generators," said Jonathan P. Mehlman, CEO of ARC Hospitality. "We believe the Wheelock Portfolio, if acquired, will further improve our position of leadership in the select-service lodging REIT sector as well as our platform's ability to drive shareholder value."
Edward T. Hoganson, Chief Financial Officer of ARC Hospitality, added, "The Wheelock Portfolio is an excellent addition to what we believe is a best-in-class portfolio of select-service lodging properties. The hotels which are expected to be acquired in an off-market transaction possess what we believe to be strong in-place cash flow and also are expected to offer several attractive value enhancement opportunities. We look forward to continuing to cultivate a strategic relationship with the highly talented Wheelock team, as well as working cohesively with Marriott International, through the closing of this transaction."
The acquisition is expected to close in the fourth quarter of 2015 and is subject to customary franchisor approvals and the completion of customary and confirmatory due diligence, as well as other conditions. ARC Hospitality intends to secure debt financing in connection with the acquisition.