Watermark Lodging Trust, a non-traded real estate investment trust created by the merger of Carey Watermark Investors and Carey Watermark Investors 2 Inc., has disclosed that the suspension of its share redemption program and distributions will remain in effect until further notice.
Distributions and redemptions were suspended in March due to reduced travel and lodging demand and related financial impact resulting from the global coronavirus (COVID-19) pandemic, the company said.
Watermark Lodging Trust indicated that any request for special circumstance redemptions may continue to be submitted, however, the requests will be deferred for review by the board until after the company announces its net asset value per share.
Any special circumstance redemptions that are approved at that time will be redeemed at a price equal to 95 percent of the NAV per share.
The REIT previously disclosed that its operations were significantly impacted by the pandemic and it expects this to continue for the foreseeable future.
“Even when all of our hotels are able to reopen, we expect demand for our hotels to recover slowly and over time until the spread of the virus, the fear of its spread and government-imposed quarantines and restrictions on travel and large gatherings subside,” the company said in a May 2020 filing with the SEC. “In addition, the company expects to have to reconfigure the layout of its properties, add cleaning services and systems and take other steps to seek to address customer concerns, which will require the company to incur expenditures which may be material.”
Shareholders of Carey Watermark Investors 1 and Carey Watermark Investors 2, two publicly registered non-traded REITs managed by affiliates of W.P. Carey Inc. (NYSE: WPC) and Watermark Capital Partners, approved the merger of the two companies in April 2020 to create a self-managed non-traded REIT named Watermark Lodging Trust. The company’s portfolio included ownership interests in 12 hotels as of March 31, 2020.