Service Properties Trust Sells $534M Hotels, Plans $175M-$200M Asset Sales to Boost EBITDA
Service Properties Trust sold 66 hotels (8,300 keys) in Q4 for $534M and 112 hotels (14,600 keys) in 2025 for $860M, using proceeds to redeem $800M of 2026 debt and repay $300M of 2027 notes. It expects $175M-$200M from planned sales of 16 hotels, boosting annual EBITDA by $13M.
1. Asset Dispositions and Debt Reduction
During Q4, SVC closed sales of 66 hotels (8,300 keys) for $534M and completed 112 hotel dispositions (14,600 keys) in full-year 2025 for $860M. The company relaunched marketing of nine focused-service and seven Sonesta-managed full-service properties targeting $175M-$200M in proceeds to redeem $800M of 2026 debt and repay $300M of 2027 notes.
2. Refinancing and Balance Sheet Actions
SVC priced $745M of five-year mortgage financing at a weighted coupon of 5.96%, secured by 158 retail properties appraised at $1.1B. Proceeds funded redemption of $700M of 8.375% notes due 2029 and are expected to save $14M annually, reducing the weighted average interest rate to 5.95% on $5.2B of debt.
3. Operational Performance and Portfolio Trends
Portfolio RevPAR rose 70 basis points year-over-year, outperforming the lodging industry by 180 basis points, though adjusted hotel EBITDA fell 35% to $21.3M due to higher labor costs and disposition-related disruptions. Leadership changes at Sonesta and $101M in net lease acquisitions also position the REIT for improved cash flows.