Service Properties Trust just securitized 158 retail properties for $745 million at a weighted average coupon of 5.96%, using $1.1 billion in collateral to retire 8.375% notes. When your best assets only buy you a 240-basis-point improvement, the balance sheet is telling you something the press release won't.
Service Properties Trust's director just put nearly $50 million into a stock trading at $1.20 per share, right after a 479-million-share dilution that was itself a last resort to retire $550 million in debt. The insider confidence headline writes itself, but the balance sheet tells a different story.
Service Properties Trust just issued 417 million new shares at $1.20 each to raise $500 million it needs to cover debt coming due in 2027. If you've ever watched a REIT try to outrun its own capital structure, you know how this movie ends.
Service Properties Trust has unloaded 123 hotels at a blended price that tells you everything about what the market thinks these assets are worth... and what it means for select-service valuations industry-wide.
A former Sonesta development chief is making the rounds talking about what needs fixing in the industry. He's not wrong. But the fact that we're still having this conversation tells you everything you need to know.
