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Lodging Fund REIT III Acquires Texas Hotel by UPREIT Transaction

Business partnership meeting in office

Lodging Fund REIT III has acquired the 166-room Aggieland Boutique Hotel in College Station, Texas via an UPREIT contribution by CS Real Estate Holding LLC. Lodging Fund REIT III announced that it intends to convert the property into a Voco by IHG.

The aggregate consideration for the College Station Voco Hotel Property under the College Station Voco Contribution Agreement is $18.5 million plus closing costs, subject to adjustment as provided in the College Station Voco Contribution Agreement.

The company says the majority of the consideration consists of the assumption or refinancing by the partnership of existing debt secured by the College Station Voco Hotel Property. The remaining consideration consists of the issuance by the operating partnership of Series T limited units of the operating partnership and cash at closing.

As required by the College Station Voco Contribution Agreement, the partnership will deposit $50,000 into escrow as earnest money pending the closing or termination of the College Station Voco Contribution Agreement. Except in certain circumstances, if the partnership fails to perform its obligations under the College Station Voco Contribution Agreement, it will forfeit the earnest money.

Upon closing, the parties say they will enter into an amendment to the amended and restated limited partnership agreement of the operating partnership to evidence the issuance of the Series T limited units to the College Station Voco Contributor. Such Series T limited units will be entitled to annual cash distributions of up to 6.0% of the value of the Series T limited units for three years after closing, depending upon the net operating income of the College Station Voco Hotel Property during each such applicable year.

The Series T limited units will convert into common limited units of the operating partnership beginning 36 months after the closing or the sale of the College Station Voco Hotel Property or substantially all of the operating partnership’s assets.

For more Lodging Fund REIT news, please visit their directory page.