NEW YORK—American Realty Capital Hospitality Trust, Inc. (ARC Hospitality) 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, L.P. sponsored by Wheelock Street Capital, LLC, a real estate private equity firm.
ARC Hospitality intends to acquire fee simple interests in the Courtyard Austin Round Rock in Austin, TX; the Courtyard College Station in College Station, TX; the Courtyard Nashville at Opryland and Fairfield Inn & Suites Nashville at Opryland in Nashville, TN; and the SpringHill Suites Cincinnati North/Forest Park in Cincinnati.
Each of the hotels is a select-service property branded by Marriott International and all are located near a variety of demand generators such as corporate headquarters, colleges and universities, hospitals, tourist attractions, retail centers, convention centers and airports.
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, enhancing its positioning as one of the largest owners of select-service hotels (by enterprise value) in the North American lodging REIT sector, according to the company.
“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, CFO 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.