The initial public offering for Procaccianti Hotel REIT Inc., a publicly registered non-traded real estate investment trust sponsored by privately-held real estate firm Procaccianti Companies Inc., has been declared effective by the Securities and Exchange Commission.
The REIT is offering up to $500 million in shares of common stock, consisting of three share classes: Class K shares, Class K-T shares, and Class K-I shares, as well as $50 million in distribution reinvestment plan shares.
Proceeds from the offering will be used the fund the purchase of hospitality properties throughout the United States, as well as distressed debt and preferred equity with the intent of acquing hotel properties underlying these types of investments. Procaccianti Hotel Advisors LLC will serve as the REIT’s advisor, and S2K Financial LLC will serve as the dealer manager.
Class K shares are priced at $10.00 each and have a 5.0 percent selling commission and 3.0 percent dealer manager fee.
Class K-T shares are priced at $10.00 each and have a 3.0 percent selling commission, 3.0 percent dealer manager fee, and an annual 1.0 percent stockholder servicing fee, which will cease once total underwriting compensation equals 10.0 percent.
Class K-I shares are priced at $9.50 each and have a 3.0 percent dealer manager fee, and no selling commission or stockholder servicing fee.
All share classes are available through various distribution channels; however, Class K-I shares are only available through fee-based programs of participating broker-dealers, registered investment advisers not affiliated with a participating broker-dealer, and to institutional investors.
The company previously launched a private offering in September 2016 that raised approximately $15.4 million. As a result, there is no minimum number of shares the REIT must sell before accepting subscriptions in this offering.
Procaccianti Companies is a second-generation real estate investment and management company that has built a national platform that encompasses all sectors of real estate since its predecessor’s formation in 1958. The firm owns TPG Hotels & Resorts, one of the largest privately held owner/operators of hotels in the United States. As of March 31, 2018, through a joint venture with Procaccianti Convertible Fund LLC, the REIT owned a 51 percent interest in two select-service hotels purchased for $38.5 million.