ARA H-Trust to divest two Hyatt hotels for $42m

The REIT will use net proceeds to repay debt or acquire new properties.

ARA US Hospitality Trust (ARA H-Trust) will divest two hotels to GHM Properties for $42m (US$31.0m), representing a 1.3% discount on the total valuation of $42.5m (US$31.4m).

The assets for sale include the Hyatt House Shelton in Connecticut (HHS) and the Hyatt House Philadelphia Plymouth Meeting in Philadelphia, Pennsylvania (HHPM).

The two assets are extended-stay hotels on freehold land in Connecticut and Pennsylvania, respectively. 

The 127-room HHS  has been operating since 2010 and was last renovated in 2017.

Meanwhile, HHMP has 131 rooms, opened in 2000, and underwent renovations in 2016.

On a pro forma basis, the divestment will reduce the company’s net property income to $60.7m (US$44.8m) from $63.2m (US$46.7m), and lower its dividend per share (DPS) to $0.44 (US$0.327) from $0.46 (US$0.343).

The REIT will use net proceeds from the divestment to repay bank loans to improve the company’s leverage ratio, cover general working capital needs, or acquire new properties.