Condor Hospitality Trust is selling its real estate portfolio to Blackstone Real Estate Partners for US$305 million in an all-cash transaction without any assumption of debt. Condor currently owns 15 properties with some 1,908-rooms in the select-service segment fully unencumbered of management contracts, and the deal values the properties at approximately US$160,000 per key.
Blackstone has already talked with two shareholders who hold approximately 60% of Condor shares and have agreed to vote in favor of the deal. The deal is expected to close in Q4 2021.
Based on 2019A metrics, pricing represents 11.3x Hotel EBITDA and a 7.7% NOI cap rate, according to R.W. Baird analyst notes, who added that the hotels predominantly located in secondary and tertiary markets in the South and Southeast have been performing well.
Since Blackstone is only acquiring the assets, Condor will liquidate the business after the deal closes and distribute net cash proceeds to shareholders.
R.W. Baird also noted that in July 2019, NexPoint Hospitality Trust agreed to acquire Condor for US$11.10/share in an all-cash transaction, valuing the company US$318 million, which included more than US$22 million of transaction-related costs. However, the onset of the pandemic led to a deal termination in September 2020.
The deal signifies continued growth in transaction volume and strong interest in limited-service assets.