American Realty Capital Hospitality Trust Inc., a publicly registered non-traded real estate investment trust sponsored by AR Capital, has entered into a commitment letter with Deutsche Bank AG New York Branch and Deutsche Bank Securities Inc. to provide up to $450 million in financing for the company’s previously announced acquisitions of separate, independent hotel portfolios.
Comprised of 44 hotels with 5,271 rooms in 18 states, the three portfolios are expected to be acquired for an aggregate purchase price of $743.9 million in seven separate closings tentatively scheduled over the next nine months. American Realty Capital Hospitality Trust agreed to acquire the portfolios from affiliates of Summit Hotel Properties (NYSE:INN), Noble Investment Group LLC and Wheelock Street Capital LLC. To read more, click here.
Subject to certain conditions, including the lender’s satisfactory completion of due diligence and the negotiation and execution of definitive loan documentation, this new term loan facility may be drawn from time to time to fund the company’s acquisition of the 44 hotels and for general working capital purposes.
The new borrowing facility is expected to have a term of up to five years including extension options and bear interest at a rate equal to 30-day LIBOR plus a spread of between 2.75 percent and 3.25 percent. The company’s fee interests in the acquired hotels will secure the term loans. The closing of the facility is expected to occur in August.
ARC Hospitality’s investment strategy focuses on acquiring stable, institutional quality and strategically located lodging properties in North America branded by premium national hotel brands.