Lodging Fund REIT III Inc., a publicly registered non-traded real estate investment trust, has purchased Home2 Suites by Hilton hotel property located in Lubbock, Texas for approximately $14.2 million, exclusive of closing costs.
The Home2 Lubbock is a 100-room extended-stay hotel that includes full kitchens in each room, 1,090 square feet of meeting space, a business center, fitness center, outdoor pool, complimentary parking and pet-friendly accommodations. The property opened in May 2015.
The company funded the purchase with proceeds from its ongoing private offering and assumed an existing $8 million loan encumbering the property. The original amount of the loan was $8.6 million, has a fixed interest rate of 4.69 percent per year and matures on October 6, 2026 with no extension option.
Lubbock is the largest city in the Texas panhandle region, with major demand drivers including Texas Tech University, an NCAA Division I school with more than 30,000 students, and Covenant Health System, which is undergoing a building and renovation project of approximately $450 million.
National Hospitality Services will provide property management and hotel operations management services for the property.
Lodging Fund REIT III was formed in April 2018 to invest in limited-service, select-service and extended stay hotel properties located primarily in “America’s Heartland,” which the company defines as the geographic area from North Dakota to Texas and the Appalachian Mountains to the Rocky Mountains.
The REIT raised $46.0 million in investor equity, as of the third quarter of 2019, and launched a $100 million private offering in June 2018. As of September 30, 2019, the REIT owned a $50.9 million portfolio of four hotel properties with a total of 406 rooms located in four states.