American Realty Capital Hospitality Trust has agreed to terminate its real estate purchase agreement to acquire 10 hotels containing 996 guestrooms from Summit Hotel Properties Inc.
It was the second deal termination for ARC Hospital Trust following the cancellation of fundraising.
The $89.1 million Summit deal was the second leg of scheduled purchase from Summit Hotels. The deal was expected to close Dec. 29, 2015 but ran into trouble when ARC Hospitality Trust’s sponsor, AR Capital LLC, suspended capital raising in November 2015 for the REIT and handful of other sister REITs.
As a result of this termination, ARC Hospitality Trust forfeited a $9.1 million non-refundable earnest money deposit.
On Dec. 15, 2015, the REIT also terminated its agreement with Wheelock Street Capital for the acquisition of five hotels. On that deal, ARC Hospitality Trust forfeited $10 million in earnest money previously deposited.
The failure to close on the acquisitions “could have a material adverse effect on our financial condition and results of operations and our ability to pay distributions from cash flow from operations,” ARC Hospital Trust acknowledged in a federal filing announcing the terminated agreements.
The 10 Summit Hotel properties affected by the termination are as follows.
Hotel -- Location -- Number of Rooms
Residence Inn -- Jackson, MS -- 100
Holiday Inn Express -- Vernon Hills, IL -- 119
Courtyard by Marriott -- Germantown, TN -- 93
Courtyard by Marriott -- Jackson, MS -- 117
Fairfield Inn & Suites -- Germantown, TN -- 80
Residence Inn -- Germantown, TN -- 78
Aloft -- Jacksonville, FL -- 136
Staybridge Suites -- Ridgeland, MS -- 92
Homewood Suites -- Ridgeland, MS -- 91
Courtyard by Marriott -- El Paso, TX -- 90