Hospitality Properties Trust Buys $2.4B Portfolio

The company has acquired the 12 million-square-foot collection of assets from Spirit MTA REIT. The properties are net leased to tenants in a wide range of industries across 43 states.
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A 774-property net lease portfolio has changed hands for $2.4 billion in cash. Hospitality Properties Trust purchased the portfolio, spread across nearly every state in the U.S., from Spirit MTA REIT. The properties reflect combined annual cash rents of $172 million, as of March 31 of this year.

The 12 million-square-foot portfolio consists of properties in 43 states across the U.S. and is 98 percent occupied, with a weighted average lease term of 8.6 years. Tenants at the properties represent a wide range of industries and brands, including quick service and casual dining restaurants, movie theaters, health and fitness, specialty retail, auto parts and services, and other service-oriented businesses.

Hunton Andrews Kurth LLP represented Hospitality Properties Trust as legal counsel in the agreement. The firm’s team was led by Laurie Grasso, real estate partner, and Steven Haas, M&A co-head.

Once approved by Spirit MTA REIT’s shareholders, the deal is expected to close in the third quarter of this year. The purchase will more than double HPT’s assets—from 506 properties to 1,280 properties. Last June, the firm purchased the Radisson Blue Minneapolis Downtown, a 360-key hotel in Minneapolis, Minn., from an affiliate of KKR.

One of the last billion-dollar net lease portfolio deals came in 2017, when Stonemont purchased a 100-property portfolio spread across 20 states from Oak Street Real Estate Capital for $1.3 billion. According to recent data from Real Capital Analytics, after a lower-than-average Q1 2019, the single-tenant net lease retail market is on track to have its slowest year since 2011.