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Moody REITs Announce Proposed Merger

Moody National REIT I and Moody National REIT II, two publicly registered non-traded real estate investment trusts that invest in select-service hotels in major U.S. markets, are in the process of finalizing a definitive merger agreement to allow Moody REIT II to acquire Moody REIT I. The proposed merger is subject to shareholder approval.

The proposed merger has a gross consideration of $11.00 per share of Moody REIT I common stock, less certain fees and closing costs. The companies noted that Moody REIT I stockholders will receive no less than $10.25 per share if the merger is consummated.

According to the agreement, Moody REIT I stockholders have the option to receive shares of Moody REIT II common stock or cash, as long as no more than roughly 50 percent of the total net merger consideration may be paid in cash. The merger agreement includes go-shop and termination fee provisions.

Moody National REIT I’s portfolio consists of 14 assets comprised of 12 hotels and two notes receivable. The hotel portion of the REIT I portfolio consists of Marriott, Hilton and Hyatt select-service hotels.

Moody National REIT II, Inc. is a publicly registered, non-listed REIT that acquires select-service hotels in major markets across the United States.

Moody REIT I commenced its initial public offering in April 2009, and as of June 30, raised $127 million in investor equity through its initial public offering, follow-on offering and the sale of DRIP shares, according to Summit Investment Research. The company’s most recent net asset value per share was $10.75. Shares were originally sold for $10.00 each.

Moody REIT II’s portfolio consists of two hotel properties. The company has raised $60 million in investor equity since it broke escrow in July 2015. Shares were originally sold for $25.00, and have a current estimated net asset value of $25.03 each.

Both REITs are sponsored by Moody National REIT Sponsor, an affiliate of the Moody National Companies, a full-service commercial real estate company that includes mortgage, development, management, realty, title and insurance divisions. Founded in 1996, Moody National Companies has managed more than $2 billion in commercial real estate.


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