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 completed a financing transaction with a joint venture between affiliates of Ascendant Capital Partners and funds managed by Oaktree Capital Management LP.
Watermark Lodging received $200 million of preferred equity capital and a commitment of up to an additional $250 million of new preferred equity capital over the next 18 months. The investors have also been granted warrants to purchase up to 6.75 percent of the company’s fully diluted common equity.
In connection with the transaction, Russell Gimelstob, Ascendant’s chief executive officer, and Alexander Halpern, founding managing partner of Ascendant and its head of hospitality, have joined the company’s board of directors.
“This transaction provides us with additional operational and financial flexibility as we navigate the current economic environment, strengthens our balance sheet and creates a pool of capital with which we can opportunistically pursue growth,” said Michael Medzigian, chairman and chief executive officer of Watermark.
Watermark Lodging Trust suspended distributions and redemptions in March, citing reduced travel and lodging demand and related financial impact resulting from the global coronavirus (COVID-19) pandemic.
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 to create a self-managed non-traded REIT named Watermark Lodging Trust.